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Home My WebLink About09/04/2007 Council Agenda Packet'('WN 0, I L' 7 1 MARAN' 'k REGULAR COUNCIL MEETING NOTICE AND AGENDA Council Chambers 11555 W. Civic Center Drive, Marana, Arizona 85653 September 4, 2007, at or after 7:00 p.m. Ed Honea, Mayor Herb Kai, Vice Mayor Council Members Russell Clanagan Patti Comerford Tim Escobedo Carol McGorray Roxanne Ziegler ACTION MAY BE TAKEN BY THE COUNCIL ON ANY ITEM LISTED ON THIS AGENDA. Revisions to the agenda can occur up to 24 hours prior to the meeting. Revised agenda items appear in italics. AS A COUR-TESY TO OTHERS, PLEASE TUR-N OFF QR- PUT IN SUENT MODE ALL PAGERS AND CELL PHONES. Welcome to this Marana Council meeting. Regular Council meetings are usually held the first and third Tuesday of each month at 7:00 p.m. at the Marana. Town Hall, although the date or time may change, or Special Meetings may be called at other times and/or places. Contact Town Hall or watch for posted agendas for other meetings. This agenda may be revised up to 24 hours prior to the meeting. In such a case a new agenda will be posted in place of this agenda. If you are interested in speaking to the Council during Call to the Public, Public Hearings, or other agenda items, you must fill out a speaker card (located in the lobby outside the Council Chambers) and deliver it to the Town Clerk prior to the convening of the meeting. All persons attending the Council meeting, whether speaking to the Council or not, are expected to observe the Council Rules, as well as the rules of politeness, propriety, decorum and good conduct. Any person interfering with the meeting in any way, or acting rudely or loudly will be removed from the meeting and will not be allowed to return. To better serve the citizens of Marana and others attending our meetings, the Council Chambers are wheelchair and handicapped accessible. Any person who, by reason of any disability, is in need of special services as a result of their disability, such as assistive listening devices, agenda materials printed in Braille or large print, a signer for the hearing impaired, etc., will be accommodated. Such special services are available upon prior request to the Town Clerk at least 10 working days prior to the Council meeting. Copies of the agenda are available the day of the meeting in the lobby outside the Council Chambers or online at www.marana.com, by linking to the Town Clerk page under Agendas, Minutes and Ordinances. For questions about the Council meetings, special services or procedures, please contact the Town Clerk, at 382-1999, Monday through Friday from 8:00 a.m. to 5:00 p.m. Posted no later than August 31, 2007, 7:00 p.m., at the Marana Municipal Complex, the Marana Operations Center and at www.marana.com under Town Clerk, Agendas, Minutes and Ordinances. 4 ?(,IVN 0, 1 ???7 9WARANA)7 ISIKE.-?/-, lzoN?, REGULAR COUNCIL MEETING NOTICE AND AGENDA Council Chambers 11555 W. Civic Center Drive, Marana, Arizona 85653 September 4, 2007, at or after 7:00 p.m. REGULAR MEETING A. CALL TO ORDER AND ROLL CALL B. PLEDGE OF ALLEGIANCE AND INVOCATION/MOMENT OF SILENCE C. APPROVAL OF AGENDA D. CALL TO THE PUBLIC At this time any member of the public is allowed to address the Town Council on any issue not already on tonight's agenda. The speaker may have up to three minutes to speak. Any persons wishing to address the Council must complete a speaker card located outside the Council Chambers and deliver it to the Town Clerk prior to the commencement of the meeting. Pursuant to the Arizona Open Meeting Law, at the conclusion of Call to the Public, individual members of the council may respond to criticism made by those who have addressed the Council, may ask staff to review the matter, or may ask that the matter be placed on a future agenda. E. PRESENTATIONS - 1. Presentation on "Marana 101" Program (Josh Wright) 2. Presentation relating to Public Works'; the Town of Marana Storm Water Ordinance (Barbara Johnson) ANNOUNCEMENTS[UPDATES PROCLAMATIONS F. MAYOR AND COUNCIL REPORTS: SUMMARY OF CURRENT EVENTS G. MANAGER'S REPORT: SUMMARY OF CURRENT EVENTS H. STAFF REPORTS GENERAL ORDER OF BUSINESS 1. CONSENT AGENDA The Consent Agenda contains items requiring action by the Council which are generally routine items not requiring Council discussion. A single motion will approve all items on the Consent agenda, including any resolutions or ordinances. A Council Member may remove any issue from the Consent agenda, and that issue will be discussed and voted upon separately, immediately following the Consent agenda. ,O*N 0, 9 MARAN 4 A 7 REGULAR COUNCIL MEETING NOTICE AND AGENDA Council Chambers 11555 W. Civic Center Drive, Marana, Arizona 85653 September 4, 2007, at or after 7:00 p.m. 1. Resolution No. 2007-146: Relating to Liquor Licenses; ap provaland recommendation to the State Liquor Board for a new No. 12 (Restaurant) liquor license submitted by David Elliott McGuire on behalf of Monkey Business entertainment, located at 8581 N. Silverbell Road (Jocelyn Bronson) 2. Resolution No. 2007-147: Relating to Liquor Licenses; approval and recommendation to the State Liquor Board for a new No. 09 (Liquor Store) liquor license submitted by Vim Kenneth Kwiatkowski on behalf of Circle K Store #5537, located at 4900 W. Ina Road (Jocelyn Bronson) 3. Resolution No. 2007-148: Relating to Public Works; approving and authorizing an updated version of the Town of Marana storm water management program (plan) as required by state and federal law (Barbara Johnson) 4. Resolution No. 2007-149: Relating to Community Development; granting discretionary funding in the amount of $15,000 and use of Heritage House office space to the Marana Arts Council, Inc., an Arizona 501(c)(3) non- profit organization, to support the arts and artistic expression in Marana (T. Van Hook) 5. Resolution No. 2007-150: Relating to the Police Department; approving and authorizing the execution of a task force agreement between MPD and the United States Department of Justice, Drug Enforcement Administration (Richard Vidaurri) 6. Minutes of the July 24, 2007 special meeting and the August 14, 2007 special meeting. J. COUNCIL ACTION 1. a. Ordinance No. 2007.21: Relating to Municipal Court; revising court fees; amending Marana Town Code Section 5-6-1 entitled "Fee Schedule for Court Costs;" and declaring an emergency (Jane Fairall) b. Resolution No. 2007-151: Relating to Municipal Court; declaring the revisions to Town Code Title 5 adopted by Marana Ordinance No. 2007.21 as a public record filed with the Town Clerk; and declaring an emergency (Jane Fairall) ,?WN 91 MARANA) REGULAR COUNCIL MEETING NOTICE AND AGENDA Council Chambers 11555 W. Civic Center Drive, Marana, Arizona 85653 September 4, 2007, at or after 7:00 p.m. K. BOARDS, COMMISSIONS AND COMMITTEES 1. Resolution No. 2007-152: ordering and declaring formation of the Saguaro Springs Community Facilities District; approving and authorizing the execution and delivery of a District Development, Financing Participation and Intergovernmental Agreement (Saguaro Springs Community Facilities District) and declaring an emergency (Frank Cassidy) L. ITEMS FOR DISCUSSION/POSSIBLE ACTION M. EXECUTIVE SESSIONS Executive Session pursuant to A.R.S. §38-431.03 (A)(3), Council may ask for discussion or consultation for legal advice with the Town Attorney concerning any matter listed on this agenda. Executive Session pursuant to A.R.S. §38-431.03(A)(3),(4),(6) and (7) for legal advice with the Town Attorney concerning water rights and water service issues and to consult with and instruct the Town Attorney and the Town Manager concerning the 1979 intergovernmental agreement between the Town of Marana and Pima County relating to sewer service within the Marana town limits and to direct the Town Manager and Town Attorney with respect to that agreement (Frank Cassidy) N. FUTURE AGENDA ITEMS Notwithstanding the mayor's discretion of what items to place on the agenda, if three or more council members request an item to be placed on the agenda, it must be placed upon the agenda for the second regular town council meeting after the date of the request (Marana Town Code, Title 2, Chapter 2-4, Section 2-4-2 B) 0. ADJOURNMENT TOWN COUNCIL MEETING TOWN OF MARANA INFORMATION MEETINGDATE: September4,2007 AGENDAITEM: E. I TO: Mayor and Council FROM: Joshua H. Wright, Assistant to the Town Manager SUBJECT: Presentation on "Marana 101" Program DISCUSSION The "Marana 10 1 " new employee orientation program was developed by a staff committee to provide new Town of Marana staff with a better way to meet other new employees, learn the roles of each department, and become overall more familiar with the Town and its rich history. The program was implemented on March 1, 2007 and graduated its first class of approximately 20 new staff members on August 27, 2007. Over the course of 6 months, staff enrolled in the class attended 12 sessions which included presentations by all Town departments, "community partners" including many local nonprofit and government agencies, a history of Marana presented by Mayor Ed Honea and former Mayor Ora Ham, and a tour of Marana and its major projects. The Marana 10 1 program was rated very highly by the first class of participants and will begin a second session in September 2007. Future plans for the program include transferring it to the Town Clerk's Office to be integrated with the existing Citizens Resource Education Workshop (CREW) program. ATTACHMENTS None. A brief presentation will be made to the Council during discussion of this item. RECOMMENDATION None. Presentation item only. SUGGESTED MOTION No motion necessary. Brief Title 212412004 L-33 PMFJC TOWN COUNCIL MEETING TOWN OF MARANA INFORMATION IVILL YING DATE: September 4, 2007 AGENDAITEM: E. 2 TO: MAYOR AND COUNCIL FROM: Barbara Johnson, Director of Public Works SUBJECT: Presentation relating to Public Works; the Town of Marana Storm Water Ordinance DISCUSSION On March 7, 2006, Mayor and Council adopted the Town of Marana Storm Water Management Program (Plan) that requires the Town to develop a Storm Water Ordinance to address non-storm water discharges, construction site storm water runoff, and post-construction storrn water runoff. This requirement must be completed by November 2007. The Ordinance was drafted in January 2007 and was discussed at a series of internal staff meetings. A revised draft was presented at a Town of Marana sponsored Stakeholder Workshop in February. Staff received 140 comments from stakeholders. The draft was also presented at the Southern Arizona Homebuilders Association (SAHBA) Storm Water Pollution Prevention Plan (SWPPP) Subcommittee meetings between February and June. The draft was then submitted to the Town of Marana Legal Department for review. This Ordinance represents a collaborative effort on the part of Town of Marana staff and stakeholders. The Ordinance will be incorporated into the Land Development Code as Title 25. ATTACHMENTS There will be a power point presentation, a copy of the Town of Marana draft Storm Water Ordinance and a copy of the letter of support from SAHBA. tOO005964.DOCI) 0 JAr, ow 0 *0 M 0 r-I cD-3 3 M CD w ?l (a f-t- CD 0 3 CD CD 0 o (a 3 cn #--I- 0 "n 3 I > CD, 0 m CD CD 0 CL C/) CD ri-l- < 0 CD 0 0 -0 cn 3 C: CD 0 = r.4. 0 c CD M 00 0 3 CD CL 0 -0 r-4- 0 r-1. 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I" 0 0 0 on CD 0 0) < C: M CD Q. 0 CD 0 Q) (n CD CD 0 < 0 C CD CD D (n 0 CD 0. 3 0 -0 '0 (n 3 N- cD CD CD C/) (a CD CD CD (n cn 0 CL ?l m 0 _0 = C --I 3m = > CL CD 0 0 --1 r-f- rmq- RM 0 =I- r-f- 0 CD FD 0 > 3 -n cn iqm 3 r-f- 0 0 CD 3 0 CD 0 CD x CD 3 0 0 0 ?u ? m MMI (n o 0 cr CD 0 1 r-4- 00 h =37 Z CD 0 C/) C/) 0 M"l 3 CD 01"T CD 0 (D CD C) cn cn o 0. < 0 CIL 0 MIN 0 3 m 0 CD 3 CD T CID FD co r-4- CD ?o c 0- 0 0 0 :3 (n 0 -0 3 16-0.. CD 0 0 :3 cn 7C) CD 0 0 :3 cn CD CD 3 CD cn CD _0 0 0 K CD 0 CD 0 mh (n r-f- 0 CD MMI CD cn 0 0 CD U) cn U) c cr 3 0 -n CD CD 0 cn f-f- 0 ?l 3 CD "Ol T 0 0 T "Ol CD CD ?l f-f- cn ...1 00 CL 0 73 0 :3 0 --q 0 K 0 CL 0 0 0 0 :3 C/) CD ?o r-f- CD 3 cr CD "n 0 F*4 CD CD on CD CD '0 o CD 0 N CD 0 CD 0 CD 3 CD 0 h ?A- MMq oll TITLE 25 STORMWATER MANAGEMENT SECTIONS: 25.01 Title, Purpose, and General Provisions 25.01.01 Purpose 25.01.02 Definitions 25.01.03 Applicability 25.01.04 Delegation of Authority for Administration and Enforcement 25.01.05 Regulatory Consistency 25.01.06 General 25.01.07 Severability 25.02 Prohibitions and Controls to Reduce the Discharge of Pollutants in Stormwater 25.02.01 General Requirements 25.02.02 Prohibitions of Non-Stormwater Discharges to the Municipal Storm Sewer System; Exemptions 25.02.03 Operating Facilities and Activities 25.02.04 Construction Sites 25.02-05 Stormwater Pollution Prevention Plans 25.02.06 Maintenance of Stonnwater Facilities 25.02.07 Cleanup and Notification Requirements 25.03 Compliance Monitoring 25.03.01 Inspections 25.03.02 Enforcement and Penalties 25.01 GENERAL PROVISIONS 25.01.01 Purpose These regulations establishminimuni storinwater management requirements for the management of pollutants that are or may be discharged to the municipal stonn sewer system. The purpose is to improve the quality of stormwater discharges and to enable the Town to comply with all applicable State and Federal laws, including but not limited to, the Clean Water Act (33 United States Code 1251 et seq.), the National Pollutant Discharge Elimination System Regulations (40 Code of Federal Regulations Part 122), and the Town's Arizona Pollutant Discharge Elimination System (AZPDES) MS4 General Permit (Arizona Administrative Code RI 8-9-A902). 25.01.02 Definitions Unless a provision explicitly states otherwise, the following terms and phrases, as used in this Title, shall have the meanings hereinafter designated. Revised 04/20/07 1 of 14 ADEQ- Arizona Department of Environmental Quality, regulatory entity of the State of Arizona responsible for administering various Federal and State environmental laws and programs, including most water quality programs, air quality, and waste programs. AZPDES permit -any permit issued by the Arizona Department of Envirom-nental Quality delegated pursuant to 33 USC § 1342(b) that authorizes the discharge of pollutants to waters of the United States, whether the permit is applicable on an individual, group, or general area- wide basis in compliance with the Clean Water Act (CWA). Best management practices (BMPs) - schedules of activities, prohibitions of practices, maintenance procedures, and other management practices to prevent or reduce the discharge of pollutants to waters of the United States. BMPs also include treatment requirements, operating procedures, and practices to control plant site runoff, spillage or leaks, sludge or waste disposal, or drainage from raw material storage. Clean Water Act (CWA) - the Federal water pollution control act, as amended, 33 United States Code 1251 et. seq. CGP - Construction General Permit Common Plan of Development - a smaller project is part of a larger common plan of development or sale if the project collectively will disturb I or more acres, e.g., a single private or commercial lot that is part of a subdivision or commercial development. Contractor - synonymous with the term "builder" and means any person, finn, partnership, corporation, association or other organization, or a combination of any of them, that, for compensation, undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid or responds to a request for qualification or a request for proposals for construction services to, does himself or by or through others, or directly or indirectly supervises others to: (a) Construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation Or Other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or any other structure or work in connection with the construction. (b) Connect such structure or improvements to utility service lines and metering devices and the sewer line. (c) Provide mechanical or structural service for any such structure or improvements. A.R.S. §32- 1101(3). Revised 04/20/07 2 of 14 Developer - Any person, group or entity proposing or constructing a development as defined by the Town of Marana Land Development Code Discharge - any addition of any pollutant to waters of the United States from any point source. A.R.S. §49-255 (2). EPA - the United States Environmental Protection Agency charged with primary enforcement of the Clean Water Act (CWA). Final Stabilization - means that either: 1. All soil disturbing activities at the site have been completed and either of the two following criteria are met: a. A uniform (e.g., evenly distributed, without large bare areas) perennial vegetative cover with a density of 70 percent of the native background vegetative cover for the area has been established on all unpaved areas and areas not covered by permanent structures, or b. Equivalent permanent stabilization measures (such as riprap, gabions, or geotextiles) have been employed. 2. When background native vegetation will cover less than 100 percent of the ground (e.g., and areas, beaches), the 70 percent coverage criteria is adjusted as follows: if the native vegetation covers 50 percent of the ground, 70 percent of 50 percent (.70 x .50 = .35) would require 35 percent total cover for final stabilization. On a beach with no natural vegetation, no stabilization is required. 3. For individual lots in residential construction final stabilization means that either: a. The homebuilder has completed final stabilization as specified above, or b. The homebuilder has established temporary stabilization including perimeter controls for an individual lot prior to occupation of the home by the homeowner and informing the homeowner of the need for, and benefits of, final stabilization, or c. For construction projects on land used for agricultural purposes (e.g., pipelines across crop or range land), final stabilization may be accomplished by returning the disturbed land to its preconstruction agricultural use. Areas disturbed that were not previously used for agricultural activities, such as buffer strips immediately adjacent to "water of the United States," and areas which are not being returned to their preconstruction agricultural use must meet the final stabilization criteria above. Illicit Discharge - any discharge to a storm drain system that is not composed entirely of stormwater except discharges pursuant to a NPDES or AZPDES permit, discharges resulting from emergency fire fighting activities, and discharges further exempted in Section 25.02.02 of this Title. Monitoring - Periodic or continuous surveillance or testing to determine the level of compliance with statutory requirements and/or pollutant levels in various media or in humans, plants, and animals. Revised 04/20/07 3 of 14 Municipal Separate Storm Sewer System (MS4) - includes, but is not limited to, those facilities located within the Town and owned or operated by a public entity by which stormwater may be collected and conveyed to waters of the United States, including any roads with drainage systems, public streets, inlets, curbs, gutters, piped storm drains and retention or detention basins. National Pollutant Discharge Elimination System (NPDES) permit - A discharge permit issued by the U.S. EPA in compliance with the Federal Clean Water Act. N01 - Notice of Intent NOT - Notice of Termination Operator - In the context of stormwater associated with construction activity, means any person associated with a construction project that meets either of the following two criteria: I - The person has operational control over construction plans and specifications, including the ability to. make modifications to those plans and specifications; or - 2. The person has day-to-day operational control of those activities at a project which are necessary to ensure compliance with a SWPPP for the site or other permit conditions (e.g., they are authorized to direct workers at a site to carry out activities required by the SWPPP or comply with other permit conditions). This definition is provided to inform operators of how the regulatory definitions of "owner or operator" and "facility or activity" are applied to discharges of stormwater associated with construction activity. Owner or operator - the owner or operator of any "facility or activity" subject to regulation under the NPDES program. Person - any individual, partnership, co-partnership, firm, company, corporation, association, joint stock company, trust, estate, governmental entity, or any other legal entity; or their legal representatives, agents, or assigns. Point source - any discernible, confined, and discrete conveyance, including but not limited to, any pipe, ditch, channel, tunnel, conduit, well, discrete fissure', container, rolling stock, concentrated animal feeding operation, vessel or other floating craft from which pollutants are or may be discharged to navigable waters. Point source does not include return flows from irrigated agriculture. A.R.S. §49-201 (27). Pollutant - fluids, contaminants, toxic wastes, toxic pollutants, dredged spoil, solid waste, substances and chemicals, pesticides, herbicides, fertilizers and other agricultural chemicals, incinerator residue, sewage, garbage, sewage sludge, munitions, petroleum products, chemical wastes, biological materials, radioactive materials, heat, wrecked or discarded equipment, rock, sand, cellar dirt and mining, industrial, municipal and agricultural wastes or any other liquid, solid, gaseous or hazardous substances. A.R. S. §49-201 (28). Revised 04/20/07 4 of 14 Pollution - the alteration of the physical, thermal, chemical, or biological quality of, or the contamination of, any Water of the State or Water of the-United States, that renders the water harmful, detrimental, or injurious to humans, animal life, vegetation, or property, or to the public health, safety, or welfare, or impairs the usefulness or the public enjoyment of the water for any lawful or reasonable purpose. Release - means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, placing, leaching, dumping, or disposing into or on any land in a manner that can cause pollution. Stormwater - stormwater runoff, snow melt runoff, and surface runoff and drainage. Stormwater pollution prevention plan (SWPPP) - a plan that includes site map(s), an identification of owner/operator activities that could cause pollutants in the stormwater, and a description of measures or practices to control these pollutants. Waters of the State - all waters,within the jurisdiction of this state including all perennial or intermittent streams, lakes, ponds, impounding reservoirs, marshes, watercourses, waterways, wells, aquifers, springs, irrigation systems, drainage systems and other bodies or accumulations of surface, underground, natural, artificial, public or private water situated wholly or partly in or bordering on the state. A.R.S. §49-201 (48) purposes; b. From which fish or shellfish are or could be taken and sold in interstate or foreign commerce; or c. That are used or could be used for industrial purposes by industries in interstate commerce; 4. All impoundments of waters defined as waters of the United States under this definition; 5. Tributaries of waters identified in subsections (1) through (4); 6. The territorial sea; and 7. Wetlands adjacent to waters (other than waters that are themselves wetlands) identified in subsections (1) through (6). Waters of the United States - I - All waters which are currently used, were used in the past, or may be susceptible to use in interstate or foreign commerce, including all waters that are subject to the ebb and flow of the tide; 2. All interstate waters, including interstate wetlands; 3. All other waters such as intrastate lakes, rivers, streams (including intermittent streams), mudflats, sandflats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, or natural ponds the use, degradation, or destruction of which would affect or could affect interstate or foreign commerce including any waters: a. That are or could be used by interstate or foreign travelers for recreational or other Revised 04/20/07 5 of 14 25.01.03 Applicability This Title shall apply to all activities which may potentially affect the municipal separate storm sewer system, any private storm sewer system or any Water of the Untied States within the Town of Marana. Additionally, permanent and temporary stormwater management controls, practices and facilities, constructed as part of any activities listed in this section, which are located within the Town limits, are also sub ect to this Title. The stormwater management practices and discharge standards, should such standards be established, shall apply to any construction project that disturbs one acre or more, including industrial, commercial, institutional, and residential. 25.01.04. Delegation of Authority for Administration and Enforcement The Town Engineer of the Town of Marana is delegated the authority to exercise the powers and perform the duties set forth in this Title and to administer and enforce provisions of this Title. The Town Engineer may designate other employees to exercise such powers and perform such duties, as he or she deems appropriate. 25.01.05 Regulatory Consistency This Title shall be construed to assure consistency with the requirements of the Federal'Clean Water Act (CWA) and acts amendatory thereof or supplementary thereto, applicable State or Federal implementing regulations, and the municipal AZPDES or NPDES permit and any amendments, revisions, or reissuance thereof. No permit or approval issued pursuant to this Title shall relieve a person of the responsibility to secure permits and approvals required for activities regulated by any other applicable rule, code, act, permit, or ordinance. The Town of Marana shall not certify, or defend that the applicant has met the requirements of the Federal CWA- 25.01.06 General The Town Engineer may adopt and enforce such rules, regulations, ordinances, standards, processes and forms as the Town Engineer deems necessary for the efficient administration and enforcement of this Title. The Town Engineer may interpret and enforce this Title. Upon request of the Town Engineer any other department of the Town of Marana has the authority to assist in the exercise of powers and performance of duties under this Title. 25.01.07 Severability If any provision, clause, sentence, or paragraph of this Title or the application thereof to any person, establishment, or circumstance shall be held invalid, such invalidity shall not affect the other provisions or application of this Title which can be given effect without the invalid provision or application, and to this end, the provisions of this Title are hereby declared to be severable. Revised 04/20/07 6 of 14 It 25.02 PROHIBITIONS AND CONTROLS TO REDUCE THE DISCHARGE OF POLLUTANTS IN STORMWATER 25.02.01 General Requirements A. Any person engaged in activities which will or may result in pollutants entering a storm sewer system shall undertake appropriate measures to reduce the potential to discharge such pollutants. Examples of such activities include, but are not limited to, reduction of use and proper disposal of household chemicals, such as cleaners, disinfectants, pesticides, fertilizers, carpet cleaning waste water and other pollutants associated from the ownership and use of facilities which may be a source of pollutants such as parking lots, gasoline stations, industrial facilities, construction sites, and retail establishments. B. No person shall throw, deposit, leave, maintain, keep, or permit to be thrown, deposited, placed, left or maintained, any refuse, rubbish, garbage, vegetation trimmings or other discarded or abandoned objects, articles, and accumulations, in or upon any street, alley, sidewalk, storm drain inlet, catch basin, conduit or other drainage structures, parking area, or upon any public or private plot of land so that the same might be or become a pollutant, except where such pollutant is being temporarily stored in properly contained waste receptacles or is part of a well defined compost system or pursuant to another recycling system. C. No person shall cause or permit any dumpster, solid waste bin, or similar container to leak such that any pollutant is discharged into any street, alley, sidewalk, storm drain, inlet, catch basin, conduit or other drainage structures, business place, or upon any public or private plot of land in the Town. 25.02.02 Prohibition of Non-Stormwater Discharge to the Municipal Storm Sewer System; Exemptions A. Unless expressly authorized or exempted by this Title, no person shall cause or allow the discharge to a public right-of-way or municipal storm sewer system of any substance that is not composed entirely of stormwater. B. Unless expressly authorized or exempted by this Title, no person shall use, store, spill, dump, or dispose of materials in a manner that those materials could cause or contribute to the addition of pollutants to stormwater. C. Exemptions. The following discharges are exempt from the prohibitions set forth in subsections (A) and (B) of this section: 1. Dechlorinated waters from water line flushing; 2. Landscape irrigation; 3. Diverted stream flows; 4. Rising ground waters; 5. Uncontaminated groundwater infiltration; 6. Uncontaminated pumped groundwater; 7. Discharges from potable water sources; Revised 04/20/07 7 of 14 8. Foundation drains; 9. Air condition condensation; 10. Irrigation water; 11. Springs; 12. Water from crawl space pumps; 13. Footing drains; 14. Lawn watering; 15. Individual -residential car washing; 16. Discharges from riparian habitats and wetlands; 17. Dechlorinated swimming pool discharges; and 18. Discharges or flows from emergency fire fighting activities. D. No person shall discharge to a publicly owned right-of-way or the municipal storm sewer system any exempted discharge under subsection (C) if the Town Engineer or assigned designee identifies and provides written notice to the person that the discharge has the potential to be a source of pollutants to receiving waters, waterways, or groundwater E. No person shall discharge to the municipal storm sewer system where such discharge would result in or contribute to a violation of the AZPDES stormwater permit issued to the Town, either separately considered or when combined with other discharges. Liability for any such discharge shall be the responsibility of the person causing or responsible for the discharge. 25.02.03 Operating Facilities or Activities A. All persons owning or operating premises or engaged in activities who are required by Federal or State law to submit to EPA and/or ADEQ a Notice of Intent (NOI) to comply with an NPDES or AZPDES stormwater pen-nit shall provide a copy of the authorization certificate to the Town upon request. Facilities required to apply for a stormwater permit are identified in 40 CFR 122.23(B) (14). , B. All persons engaged in activities which will or may reasonably be expected to result in pollutants entering the municipal storm sewer system shall undertake best management (BMPs) to minimize such pollutants, shall provide protection from accidental discharge of pollutants to the municipal storm sewer system and further comply with the cleanup and notification requirements of this Title. Such measures shall include any additional requirements imposed by Federal, State, County, or Local authorities. C. In the case that a specific Best Management Practice is required by the Town to prevent a pollutant from entering the municipal storm sewer system, the person receiving the notice of such a requirement may petition the Town to reconsider the application of the BMP to the premises or activity. The written petition must be received within ten (10) calendar days setting forth any reasons and proposed alternatives. The Town will act within fourteen (14) calendar days of the petition. D. No person shall establish, use, maintain, or continue any connection to the municipal storm sewer system which is causing a violation of this section. This shall apply to any connection that was made in the past, regardless of whether it was made under permit or other authorization, or whether it was permissible under the law or practices applicable or prevailing at the time of connection as of the effective date of this Title. Revised 04/20/07 8 of 14 25.02.04 Construction Sites A. All persons engaged in construction activities who are required by Federal or State law to submit to EPA and/or ADEQ a Notice of Intent (NOI) to comply with an NPDES or AZPDES stormwater permit, shall provide the Town with copies of the NOI, the site- specific stormwater pollution prevention plan (SWPPP), and the AZPDES stormwater permit issued by ADEQ. Town acceptance of the SVY`PPP is required prior to issuance of a grading permit. Construction activities that will disturb one acre or more of land area or that are part of a larger common plan of development or sale are required to apply for a stormwater permit (40 CFR 122.26(B)(I 5)). B. Any person performing construction that has submitted a copy of an approved NOI to the Town of Marana shall not cause or contribute to a violation of the AZPDES stormwater permit issued to the Town. Liability for any such discharge shall remain the responsibility of the person causing or responsible for the discharge. Any person performing construction activity shall undertake Best Management Practices to minimize or eliminate pollutants (including the discharge of sediments) from leaving the construction site, shall provide protection from accidental discharge of other pollutants to the municipal storm sewer system, and comply with the cleanup and notification requirements of this Title. Site operator shall ensure effective erosion, sediment and waste control and properly dispose of wastes, such as discarded building materials, concrete truck washout material, chemicals, litter, sanitary waste and other pollutants at the construction site that may cause adverse impacts to water quality. Such measures shall include the requirements imposed by Federal, State, County and/or Local authorities. C. Storinwater Pollution Prevention Plans shall be prepared and reviewed in accordance with the Arizona Pollutant Discharge Elimination System Construction General Permit issued by the Arizona Department of Environmental Quality. The Town of Marana shall not certify or defend that the applicant has met the requirements of the Federal Clean Water Act. D. In the case that a specific Best Management Practice is required by the Town to prevent a pollutant from entering the municipal storm sewer system, the person receiving the notice of such a requirement may petition the Town to reconsider the application of the BMP to the premises or activity. The written petition must be received within ten (10) calendar days setting forth any reasons and proposed alternatives. The Town will act within fourteen (14) calendar days of the petition. E. Basins with a retention component may be used as temporary sediment basins during construction provided the following conditions are met: 1. Prior to acceptance, the basin shall be retested for percolation; and 2. Additional measures must be put in place to collect sediment prior to entry into the basin, i.e. the basin must be part of a cascading sediment trapping system. F. Exemptions: The following discharges are exempt from the prohibitions set forth in Section 25.02.03 for construction sites or activities: 1. Discharges from fire-fighting activities; 2. Fire hydrant flushing; 3. Waters used to wash vehicles where detergents are not used; Revised 04/20/07 9 of 14 4. Water used to control dust, provided effluent or other wastewaters are not used; 5. Potable water sources including water line flushing; 6. Routine external building wash down where detergents are not used; 7. Pavement wash waters where spills or leaks of toxic or hazardous materials have not occurred (unless all spilled material has been removed) and where detergents are not used; 8. Uncontaminated air conditioning or compressor condensate; 9. Uncontaminated ground water or spring water; 10. Foundation or footing drains where flows are not contaminated with process materials such as solvents; 11. Potable water well flushing where the receiving waters are ephemeral; 12. Water used for compacting soil, provided effluent or other wastewaters are not used; 13. Water used for drilling and coring such as for evaluation of foundation materials; where flows are not contaminated with additives; and 14. Water obtained from dewatering operations/foundations in preparation for and during excavation and construction. 25.02.05 Stormwater Pollution Prevention Plans (SWPPP) A. The owner/operator shall submit two copies of a site specific SWPPP (both a narrative and engineering drawings) during the grading/improvement plan review period. B. Town of Marana staff will review the submission in accordance with applicable Federal, State, and/or Local regulations. C. A SWPPP accepted by the Town of Marana is required prior to the issuance of a grading permit. D. Two copies of the accepted SWPPP, a copy of the owner(s) and operator(s) NOI, along with copies of the accepted grading/improvement plans shall be submitted with the application for a grading permit prior to start of any work on-site. E. For projects that are part of a larger common plan of development with custom lots, the following shall apply: I . The Developer for the project shall prepare a Stormwater Pollution Prevention Plan (SWPPP) and submit a Notice of Intent (NOI) to ADEQ or EPA, with an approved copy of the NOI to the Town for the portion of the project for which they have operational control. 2. The SWPPP shall address the construction of infrastructure site development and proposed residential construction. The Developer shall submit a NOI and SWPPP with accepted grading/improvement plans with the application for a grading permit. 3. The individual buyer of a lot in a large lot/custom home site subdivision shall submit to the Town, with the application for a grading permit, a plan sheet outlining stormwater pollution prevention measures for construction on the individual lot. This plan sheet shall become an attachment to the SWPPP previously completed by the Developer and accepted by the Town. The property owner and the operator shall submit separate NOls and sign the certifications in Revised 04/20/07 10 of 14 the SWPPP. An accepted plan sheet and NOls shall be required prior to the issuance of a grading permit. F. For mass graded subdivisions, the following shall apply: I . The Developer for the project shall prepare a Stormwater Pollution Prevention Plan (SWPPP) and submit a Notice of Intent (NOI) to ADEQ or EPA, with an approved copy of the NOI to the Town for the portion of the project for which they have operation control. 2. The Developer shall prepare a SWPPP that addresses off-site and on-site Best Management Practices for erosion, sediment and waste control for both the infi-astructure and residential improvements. 3. The Developer shall be responsible for compliance with this Title until such time as the Developer can demonstrate that operational control for all portions of the site has been transferred to another operator or final stabilization for the entire site has been achieved. G. For commercial development, the following shall apply: 1. The Developer for the project shall prepare a Stormwater Pollution Prevention Plan (SWPPP) and submit a Notice of Intent (NOI) to ADEQ or EPA, with an approved copy of the NOI to the Town for the portion of the project for which they have operation control. 2. The Developer shall prepare a SWPPP to address on-site and off-site Best Management Practices for erosion, sediment, and waste control. 3. For commercial lots that are part of a common plan of development, the owner/operator for the individual lot shall submit a separate SWPPP and NOI 'with improvement plans; the SWPPP shall be accepted by the Town of Marana prior to issuance of a grading permit. H. Routine Inspection Schedule: The operator must ensure routine inspections are performed at the site to ensure that BMPs are ftinctional and that the SWPPP is being properly implemented. The operator must specify an inspection schedule in the SWPPP and may choose either of the following: 1. The site will be inspected at least once every seven (7) calendar days, or 2. The site will be inspected at least once every fourteen (14) calendar days, and also within 24 hours of the end of each storm event of 0.5 inches or greater. L Based on the results of the inspection, the operator must modify the SWPPP to include additional or modified BMPs designed to correct problems identified. The operator must complete revisions to the SWPPP within seven (7) calendar days following the inspection. J. No waivers shall be accepted by the Town of Marana for any development over one acre . in size or that is part of a larger common plan of development or sale. 25.02.06 Maintenance of Stormwater Facilities A. Property owners or operators shall warrant post-construction stormwater runoff control facilities including but not limited to, retention basins, dry wells, and other measures (as described in 40 CFR 122.34 (B)(5)(111) during the warranty period. Revised 04/20/07 11 of 14 B. Stormwater facilities shall be maintained by the owner or other responsible patty and shall be repaired and/or replaced by such person when such facilities are no longer functioning as designed. C. Disposal of waste from maintenance of facilities shall be conducted in accordance with applicable Federal, State, and local laws and regulations D. Records of installation and maintenance and repair shall be retained by the owner or other responsible party for a period of five years and shall be made available to the Public Works Department upon request. E. Any failure to maintain facilities or correct problems with facilities after receiving due notice from the Town may result in criminal or civil penalties and the Town may perform corrective or maintenance work which shall be at the owner's expense. 25.02.07 Cleanup and Notification Requirements A. In the event of a spill or release in reportable quantities as defined in 40 CFR 302, 40 CFR I 10 and 40 CFR 117, the owner, operator, or the person who has control of the source or location of any spill or release, which may result in a discharge that is not in compliance with this Title, shall immediately take all reasonable safety precautions including, if appropriate, calling 911 and completing the following steps: 1. Proceed with containinent and clean up in accordance with: i. The orders of an involved health and safety agency, or if no such orders have been issued, then: ii. The orders of an authorized representative, or if no such orders have been issued,then iii. The Stormwater Pollution Prevention Plan or approved corrective action plan utilizing Best Management Practices for the involved facility. 2. Report any violations of the Northwest Fire Department Fire code or other such applicable safety or health codes in the manner required by such code; 3. Notify the Town of Marana Environmental Engineering Division at (520) 382- 2600 of the release by telephone before noon of the next working day; 4. Provide written notification within five calendar days to the Town of Marana Environmental.Engineering Division of the type, volume, cause of the discharge, corrective actions taken, and measures to be taken to prevent future occurrences. B. Compliance with the requirement in subsection (A) of this section shall not relieve the discharger from the reporting requirements of 40 CFR 110, 40 CFR 117, and 40 CFR 302. 25.03 COMPLIANCE MONITORING 25.03.01 Inspections A. Authority to inspect. Upon presentation of credentials and at all reasonable or necessary hours, all authorized employees of the Town shall have access to all premises and to all records pertaining to those premises for purposes of ensuring compliance with this Title. Inspection, interviewing, copying, sampling, photographing, and other activities conducted on the premises shall be limited to those which are reasonably needed by the Revised 04/20/07 12 of 14 Town in determining compliance with the requirements of this Title. All persons shall allow such activities under safe and non-hazardous conditions with a minimum of delay. B. Monitoring activities. The Town may order any person engaged in any activity or owning or operating on any premises which is causing or contributing to discharges of pollutants to the municipal storm sewer system in violation of this Title or any applicable NPDES or AZPDES stormwater permit condition or that is posing a risk to public health, safety, and welfare to undertake such monitoring activities and analyses and furnish such reports as the Town reasonably may specify. The costs of such activities, analyses, and reports shall be bome in the recipient of the order. C. When inspections by Town staff reveal deficiencies in the implementation of the SWPPP a written inspection report will be provided to the owner and operator within 30 days of the inspection. D. Access refusal. If an authorized employee of the Town has been refused access to any premises, and is able to demonstrate probable cause to believe that there may be a violation of this Title, or that there is a need to inspect, interview, copy, photograph or sample as part of an inspection and sampling procedure of the Town designed to determine compliance with the requirements of this Title or any related laws or regulations, or to protect the environment and the public health, safety, and welfare of the community, then the Town may seek issuance of a search warrant from the Town Municipal Court. 25-03.02 Enforcement and Penalties A. Charges or penalties levied pursuant to this Title shall be collected by the Department of Public Works and utilized for public education and outreach in compliance with the Town's MS4 Permit. The Town Engineer shall make and enforce economic and efficient management and protection of the Town's storm sewer system. B. Owner of record. The owner of record of the property upon which a violation of this Title occurs shall be presumed to be a person having lawful control over the activity or premises unless it is demonstrated and documented that another person has knowingly and in good faith accepted responsibility for the activity at issue. If more than one person is identified as the owner, such persons shall be presumed to be jointly and severally in lawful possession and control of the activity or premises. C. Notice to Correct. The Town may issue a written Notice to Correct to any person who has violated or is in violation of this Title. Failure to comply with any act required in the Notice to Correct may result in a Notice of Violation and/or Stop Work Order as described in subsections (D) and (F) of this section. D. Notice of Violation. The Town may issue a written Notice of Violation to any person who has violated or is in violation of this Title. Failure to comply with any act required in the Notice of Violation shall be a separate violation for each day beyond the thirtieth (30'h) calendar day following the Notice of Violation. Nothing in this section shall limit the authority of the Town to take any action, including emergency actions or any other enforcement action, without first issuing a Notice of Violation. In appropriate situations the Town may notify the person orally either in person or by telephone prior to written notification. Revind 04/20/07 13 of 14 E. Consent orders. The Town may enter into consent orders, assurances of voluntary compliance, negotiated settlement agreements, or other similar documents establishing an agreement with any person responsible for noncompliance. Such documents will include specific action to be taken by the person to correct the noncompliance within a time period specified by the document, including an identification and description of the Best Management Practices and measures to utilize in implementing the order. Such documents shall have the same force and effect as any other orders issued under this Title and shall be judicially enforceable. F. Stop Work Order. For projects under construction in the Town of Marana, if the Town finds that a person has violated, or continues to violate, any provision of this Title or any related laws or regulations, or that the person's past violations are likely to recur, the Town may issue a Stop Work Order to the person directing them to cease and desist all such violations and direct the person to immediately comply with all requirements; and take such appropriate remedial or preventive action as may be needed to properly address a continuing or threatened violation. Issuance of a Stop Work Order shall not be a bar against, or a prerequisite for, taking any other action against the person. A person's failure to comply with an order issued pursuant to this Title shall constitute a violation of this Title. G. Civil Penalties. In addition to any other enforcement authority contained in this Title, the Town may issue a civil citation to any person who has violated, or continues to violate, any provision of this Title or any related laws or regulations. A person who violates any requirement of this Title or any applicable NPDES or AZPDES stormwater permit condition shall be civilly liable to the Town for a sum not to exceed $2,500 per day for each violation. H. Criminal Penalties. A person who willfully or negligently violates any provision of this Title, or any related laws or regulations shall, upon conviction, be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine not to exceed $2,500 per day for each violation and/or by imprisonment for a period not to exceed six months. 1. Criminal Prosecution. Some intentional violations may constitute criminal violations of Federal, State, and Town Law, and that under such circumstances, the Town may seek the assistance of the EPA, the State, or the Town Prosecutor to commence civil and/or criminal action against any person who violates any requirement of this Title or any applicable NPDES or AZPDES stormwater permit condition. J. The Town of Marana may withhold the issuance of permits including but not limited to building permits, native plant permits and grading permits, for the development or improvement on the parcel or any contiguous parcel of land under the ownership of a person or persons in violation of any requirement of this Title or any applicable NPDES or AZPDES stormwater permit condition. K. Liability for costs. The Town may assess liability for costs to any person in violation of this Title for all actual costs incurred by the Town in surveillance, sampling and testing, abatement, and remediation associated with a discharge. Additionally, the Town may assess liability for costs to any person whose discharge resulted in a violation of the Town's AZPDES stormwater permit. Revised 04/20/07 14 of 14 e 0 communi y builder R Southern Arizona Home Builders Association 2840 N. Country Club Road Tucson, Arizona 85716 Phone: (520) 795-5114 Fax: (520) 326-8665 Web: www.sahba.org August 14, 2007 Ms. Corby Lust Town of Marana 11555 W. Civic Center Dr, Bldg A2 Marana, AZ 85653-7003 Re: Town of Marana Ordinance President Edward P Taczanowsky 2007 Executive officers Chairman Art Flagg KB Home First Vice Chairman Randy Agron ,A. F Sterling Home Builders Second Vice Chairman Steve Craddock Lennar/US Home Corporation Secretary Martha Wright Southwest Gas Corporation Treasurer John Shorbe, Sr. Canoa Development, Inc. 2006 Past Chairman Gregory Miedema Dakota Builders, Inc. Legal Counsel John E. Kofron Fennemore Craig Dear Ms. Lust, - U-7 001"l-i This letter is written on behalf of the Southern Arizona Home Builders Association Storm Water Pollution Prevention subcommittee. We would like to thank you for the opportunity to review the Town of Marana Ordinance for Storm Water Pollution Prevention and to be able to offer comments and suggestions. We sincerely hope that our comments and/or suggestions are useful to you as you finalize the Ordinance. Please feel free to contact me if you have any questions at (520) 481-0837. Regards, 6? Ja nol C:>? SAHBA SWPPP Committee Chair Lori J. Lustigwe SAHBA Government Liaison TOWN COUNCIL MEETING TOWN OF MARANA INFORMATION MEETINGDATE: September4,2007 AGENDA ITEM: 1. 1 TO: MAYOR AND COUNCIL FROM: Jocelyn C. Bronson, Town Clerk AGENDA TITLE: Resolution No. 2007-146: Relating to Liquor Licenses; approval and recommendation to the State Liquor Board for a new No. 12 (Restaurant) liquor license submitted by David Elliott McGuire on behalf of Monkey Business Entertainment, located at 8581 N. Silverbell Road DISCUSSION David Elliott McGuire, on behalf of Monkey Business Entertainment, is applying for a new license for a No. 12 (Restaurant) liquor license for premises located at 8581 N. Silverbell Road. The State Department of Liquor Licenses & Control has completed a background investigation and has forwarded two copies of an application for a spirituous liquor license in accordance with the State of Arizona Guide to Arizona Liquor Laws. One copy of the application has been posted on the front of the proposed licensed premises for 20 days prior to this meeting. The Council, as the appropriate governing board, must hold a meeting and either approve, disapprove or offer a "no-recommendation" decision on.the application. This action must take place within 60 days of the filing of the application. If the application is approved at the appropriate government level, and no written protests have been received by the Town, and if there is no objection by the Director, the application will be approved. This process normally takes 90 days after the filing of the application. If the governing body disapproves the application or offers a - no-recommendation" decision, or if protests have been filed, the application must be set for a hearing before the State Liquor Board. The hearing may be conducted by the board or by a designated hearing officer. The purpose of a hearing is to consider all evidence and testimony in favor of or opposed to the granting of a license. The applicant for a new license bears the burden of demonstrating his or her "capability, qualifications and reliability" and that the granting of a license is in "the best interest of the community" except that, in a person-to-person transfer, an applicant need only prove his or her "capability, qualifications and reliability". An applicant in a location-to-location transfer need only prove that the granting of the license is in the "best interest of the community". I Monkey Business Entertainment The decision by the board to grant or deny an application will non-nally take place within 105 days after the application has been filed, unless the director deems it necessary to extend the time period. A.R.S. 4-201, 4-201.01, 4-203; Rule R-4-15-102. RECOMMENDATION Staff recommends approval and recommendation to the state liquor board for this liquor license. SUGGESTED MOTION I move to approve Resolution No. 2007-146. -2- MARANA RESOLUTION NO. 2007-146 RELATING TO LIQUOR LICENSES; APPROVAL AND RECOMMENDATION TO THE STATE LIQUOR BOARD FOR A NEW NO. 12 (RESTAURANT) LIQUOR LICENSE SUBMITTED BY DAVID ELLIOTT MCGUIRE ON BEHALF OF MONKEY BUSINESS ENTERTAINMENT, LOCATED AT 8581 N. SILVERBELL ROAD. WHEREAS, pursuant to A.R.S. Section 4-201, the Town Council of the Town of Marana is empowered to recommend approval or disapproval of a liquor license request to the Arizona Department of Liquor Licenses and Control; and WHEREAS, David Elliott McGuire has applied for a new No. 12 (Restaurant) liquor license on behalf of Monkey Business Entertainment, for premises located at 8581 N. Silverbell Road; and WHEREAS, Town staff filed one copy of the application in the office of the Town Clerk, and posted the other on the front of the premises at 8581 N. Silverbell Road for 20 days along with a statement requiring any bona fide resident residing, owning, or leasing property within a one mile radius in favor of or opposed to such issuance of the license to file written arguments in favor of or opposed to such issuance with the Town Clerk; and WHEREAS, the Town Council considered all statements filed by the applicant and any bona fide resident at a public meeting on September 4, 2007, and has determined that it is in the best interests of the Town and its citizens that the application for a new liquor license for Monkey Business Entertainment, filed by David Elliott McGuire for premises located at 8581 N. Silverbell Road, be approved. NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Town of Marana, Arizona, that the Town recommends approval of the application for a new No. 12 (Restaurant) liquor license filed on behalf of Monkey Business Entertainment, by David Elliott McGuire for premises located at 8581 N. Silverbell Road. Marana Resolution No. 2007-146 PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona, this 4 Ih day of September, 2007. ATTEST: Jocelyn C. Bronson, Town Clerk Mayor Ed Honea APPROVED AS TO FORM: Frank Cassidy, Town Attorney Marana Resolution No. 2007-146 No TOWN COUNCIL MEETING TOWN OF MARANA 9 MARANA 7 INFORMATION MEETINGDATE: September4,2007 AGENDA ITEM: 1. 2 '1 TO: MAYOR AND COUNCIL FROM: Jocelyn C. Bronson, Town Clerk AGENDA TITLE: Resolution No. 2007-147: Relating to Liquor Licenses; approval and recommendation to the State Liquor Board for a new No. 09 (Liquor Store) liquor license submitted by Kim Kenneth Kwiatkowski on behalf of Circle K Store #5537, located at 4900 W. Ina Road. DISCUSSION Kim Kenneth Kwiatkowski, on behalf of Circle K #5537, is applying for a new No. 09 (Liquor Store) liquor license for premises located at 4900 W. Ina Road. The State Department of Liquor Licenses & Control has completed a background investigation and has forwarded two copies of an application for a spirituous liquor license in accordance with the State of Arizona Guide to Arizona Liquor Laws. One copy of the application has been posted on the front of the proposed licensed premises for 20 days prior to this meeting. The Council, as the appropriate governing board, must hold a meeting and either approve, disapprove or offer a "no-recommendation" decision on the application. This action must take place within 60 days of the filing of the application. If the application is approved at the appropriate government level, and no written protests have been received by the Town, and if there is no objection by the Director, the application will be approved. This process normally takes 90 days after the filing of the application. If the governing body disapproves the application or offers a "no-recommendation" decision, or if protests have been filed, the application must be set for a hearing before the State Liquor Board. The hearing may be conducted by the board or by a designated hearing officer. The purpose of a hearing is to consider all evidence and testimony in favor of or opposed to the granting of a license. The applicant for a new license bears the burden of demonstrating his or her "capability, qualifications and reliability" and that the granting of a license is in "the best interest of the community" except that, in a person-to-person transfer, an applicant need only prove his or her "capability, qualifications and reliability". An applicant in a location-to-location transfer need only prove that the granting of the license is in the "best interest of the community". Circle K 4900 W. Ina Road The decision by the board to grant or deny an application will normally take place within 105 days after the application has been filed, unless the director deems it necessary to extend the time period. A.R.S. 4-201, 4-201.01, 4-203; Rule R-4-15-102. RECOMMENDATION Staff recommends approval and recommendation to the state liquor board for this liquor license. SUGGESTED MOTION I move to approve Resolution No. 2007-147. -2- MARANA RESOLUTION NO. 2007-147 RELATING TO LIQUOR LICENSES; APPROVAL AND RECOMMENDATION TO THE STATE LIQUOR BOARD FOR A NEW NO. 09 (LIQUOR STORE) LIQUOR LICENSE SUBMITTED BY KIM KENNETH KWIATKOWSKI ON BEHALF OF CIRCLE K #5537, LOCATED AT 4900 W. INA ROAD. WHEREAS, pursuant to A.R.S. Section 4-201, the Town Council of the Town of Marana is empowered to recommend approval or disapproval of a liquor license request to the Arizona Department of Liquor Licenses and Control; and WHEREAS, Kim Kenneth Kwiatkowski has applied for a new No. 09 (Liquor Store) liquor license on behalf of Circle K #5537, for premises located at 4900 W. Ina Road;and WHEREAS, Town staff filed one copy of the application in the office of the Town Clerk, and posted the other on the front of the premises at 4900 W. Ina Road for 20 days along with a statement requiring any bona fide resident residing, owning, or leasing property within a one mile radius in favor of or opposed to such issuance of the license to file written arguments in favor of or opposed to such issuance with the Town Clerk; and WHEREAS, the Town Council considered all statements filed by the applicant and any bona fide resident at a public meeting on September 4, 2007, and has determined that it is in the best interests of the Town and its citizens that the application for a new liquor license for Circle K #5537, filed by Kim Kenneth Kwiatkowski for premises located at 4900 W. Ina Road, be approved. NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Town of Marana, Arizona, that the Town recommends approval of the application for a new No. 09 (Liquor Store) liquor license filed on behalf of Circle K #5537, by Kim Kenneth Kwiatkowski for premises located at 4900 W. Ina Road. PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona, this 4 1h day of September, 2007. Mayor Ed Honea ATTEST: APPROVED AS TO FORM: Jocelyn C. Bronson, Town Clerk Frank Cassidy, Town Attorney Matuna Resolution No. 2007-147 TOWN COUNCIL c, O*N 0, MEETING TOWN OF MARANA 11 MAZANA 7 INFORMATION MEETINGDATE: September4,2007 AGENDAITEM: 1.3 TO: MAYOR AND COUNCIL FROM: Barbara Johnson, Director of Public Works SUBJECT: Resolution No. 2007-148: Relating to Public Works; approving and authorizing an updated version of the Town of Marana storm water management program (plan) as required by state and federal law. DISCUSSION The Town of Marana is a regulated small Municipal Separate Storm Sewer System (MS4), requiring the Town to be covered by a water quality pen-nit under the Arizona Pollutant Discharge Elimination System (AZPDES) ston-nwater program. The Arizona Department of Environmental Quality (ADEQ) administers the AZPDES program. The Town is responsible for managing stormwater and urban runoff to minimize or prevent the pollutants found in storm water from entering the Nation's waters. The Town was required to file the SWMP and a Notice of Intent to the Arizona Department of Environmental Quality (ADEQ) by the March 10, 2003 deadline. The permit requires the Town to develop a stormwater management program and write a Storm Water Management Pan (SWMP) to set the goals of the program. The Town's SWMP explains how the Town meets, or will meet, the requirements set by the Stormwater Program. The original Storm Water Management Program plan was adopted by Mayor and Council on March 7, 2006. The revised plan includes information on how the Town of Marana will educate the public, seek public participation, address construction site runoff, and how the Town will ensure that its daily operations will address the issue of ston-nwater pollution. ATTACHMENTS Copy of the revised Storm Water Management Program (Plan) RECOMMENDATION Staff recommends that the Mayor and Council adopt Resolution No. 2007-148, adopting and authorizing the Town of Marana Stonn Water Management Program and Plan. SUGGESTED MOTION I move to approve Resolution No. 2007-148. tOO005961.DOC 812712007CIH MARANA RESOLUTION NO. 2007-148 RELATING TO PUBLIC WORKS; APPROVING AND AUTHORIZING AN UPDATED VERSION OF THE TOWN OF MARANA STORM WATER MANAGEMENT PROGRAM (PLAN) AS REQUIRED BY STATE AND FEDERAL LAW. WHEREAS the Town of Marana is a regulated Phase 11 Small Municipal Separate Storm Sewer System (MS4); and WHEREAS the Town of Marana is mandated by the Arizona Department Of Environmental Quality (ADEQ) to comply with Arizona Pollutant Discharge Elimination System (AZPDES) Program requirements; and WHEREAS the Mayor and Council adopted the original Storm Water Management Program (Plan) on March 7, 2006; and WHEREAS the Town of Marana submitted a Notice of Intent (NOI) to Discharge and a Storm Water Management Program (Plan) (SWMP) in March of 2003 to the Arizona Department of Environmental Quality (ADEQ) as required by the AZPDES Phase 11 implementation; and WHEREAS the Town of Marana received an NOI authorization letter from ADEQ, and the Town is operating under an MS4 stormwater permit; and WHEREAS the Mayor and Council of the Town of Marana find that it is in the best interests of the public to reduce stormwater pollution. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, that the Storm Water Management Program (Plan) for the Town of Marana, attached as Exhibit A, is hereby approved, and the Mayor is hereby authorized and directed 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 authorized to undertake all other and further tasks required or beneficial to carry out the terms, obligations, and objectives of SWMP. PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, this 4th day of September, 2007. ATTEST: Mayor Ed Honea APPROVED AS TO FORM: Jocelyn C. Bronson, Town Clerk Frank Cassidy, Town Attorney (00005962.DOC /) The updated version of the Town of Marana storm water management program (plan) is on file and available for viewing from 8:00 a.m. to 5:00 p.m. Monday through Friday excluding holidays, at the office of the Town Clerk, 11555 W. Civic Center Drive, Marana, AZ 85653. TOWN COUNCIL MEETING TOWN OF MARANA INFORMATION MEETING DATE: September 4, 2007 AGENDAITEM: 1.4 TO: MAYOR AND COUNCIL FROM: T. VanHook, Community Development Director SUBJECT: Resolution No. 2007-149: Relating to Community Development; granting discretionary funding in the amount of $15,000 and use of Heritage House office space to the Marana Arts Council, Inc., an Arizona 501(c)(3) non-profit organization, to support the arts and artistic expression in Marana. DISCUSSION In 2000, a committed group of long-time residents, artists, business professionals, and educators began meeting to discuss the need for more art projects in the Marana area. Those infoi mal discussions led to the formation of the Marana Arts Cou ncil (MAC), which has since been incorporated and received a 501(c)3 nonprofit designation. MAC'S mission is: Blending qf'Conununity, Education, and Business Through the Arls. The purpose of MAC is to establish, stimulate, and inaintain an awareness and appreciation of the diverse traditional and cultural arts in our community. MAC proposes to accomplish these goals by vowing a strong commitment to and by participating in a variety of community-based arts events and educational programs for all age groups. Organization leaders have vowed to preserve and promote community, and to establish an environment where the arts can flourish. Over the next year, MAC will offer various educational opportunities and experiences as well as administrative services in support of artists, art agencies and audiences of all ages. MAC recognizes that Marana is richly diverse and includes regional themes such as agriculture, ranching, and a strong Native American identity. The organization's leadership believes that linking the arts and cultural activities to these strong themes is integral to Marana's success and to the strength and health of the entire region. This fits perfectly with the Mayor and Council Discretionary Funding priority to support programs that help ensures equal access to all individuals, groups, and organizations to enjoy opportunities for the preservation, development, and appreciation of artistic expression and the unique cultural heritage of the Town of Marana. MAC is requesting $15,000 in general support to assist with staff salaries and other expenses. They are also requesting continued use of the Heritage House office and shared meeting space. MAC will be required to show proof of insurance with the Town of Marana as secondary insured. , provide quarterly reports with specific deliverables, including both qualitative and quantitative measures, and share financial documentation quarterly and upon request. This will be the fifth year of Town of Marana funding for this organization. They have also secured funding commitments for other Marana partners including cash awards from Comcast ($5,000), Wal-Mart ($1,500), and generous support from the Arizona Commission on the Arts ($8,000). RECOMMENDATION Staff recommends awarding the Marana Arts Council $15,000 from the Discretionary Fund and use of an office in the Heritage House to provide the arts and artistic expression in the Town of Marana. SUGGESTED MOTION I move to adopt Resolution No. 2007-149. MARANA RESOLUTION NO. 2007-149 RELATING TO COMMUNITY DEVELOPMENT; GRANTING DISCRETIONARY FUNDING IN THE AMOUNT OF $15,000 AND USE OF HERITAGE HOUSE OFFICE SPACE TO THE MARANA ARTS COUNCIL, INC., AN ARIZONA 501 (C)(3) NON-PROFIT ORGANIZATION, TO SUPPORT THE ARTS AND ARTISTIC EXPRESSION IN MARANA. WHEREAS, the Town of Marana has established a Discretionary Fund to support local no-profit and grassroots organizations forwarding the priorities set by Mayor and Council; and WHEREAS, Mayor and Council recognize the need to help ensure equal access to all individuals, groups, and organizations to enjoy opportunities for the preservation, development, and appreciation of artistic expression and the unique cultural heritage of the Town of Marana; and WHEREAS, the Marana Arts Council, Inc. is a non-profit organization established to stimulate and maintain awareness and appreciation of the diverse traditional and cultural arts in the Marana community; and WHEREAS, Marana Arts Council, Inc. is working to provide a positive activity that promote the arts and Marana unique artistic heritage. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, to grant the Marana Arts Council, Inc. $15,000 from the Discretionary Fund and in-kind office space to provide support for the arts and artistic expression in the Town of Marana. PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, this 4 1h day of September, 2007. ATTEST: Jocelyn C. Bronson, Town Clerk Mayor Ed Honea APPROVED AS TO FORM: Frank Cassidy, Town Attorney TOWN COUNCIL MEETING TOWN OF MARANA INFORMATION MEETING DATE: September 4, 2007 AGENDAITEM: 1.5 TO: MAYOR AND COUNCIL FROM: Richard Vidaurri, Chief of Police SUBJECT: Resolution No. 2007-150: Relating to the Police Department; approving and authorizing the execution of a task force agreement between MPD and the United States Department of Justice, Drug Enforcement Adudnistration DISCUSSION In March of 2005 the Marana Police Department teamed up with the United States Department of Justice, Drug Enforcement Administration (DEA), as a member of the DEA Tucson Task Force. As a part of that agreement the Police Department assigned experienced Marana police officers to participate as members of the DEA Tucson Task Force. The mission of the Task Force is to disrupt the illicit drug traffic in the State of Arizona area and prosecute perpetrators by immobilizing targeted violators and trafficking organizations, gathering and reporting intelligence data relating to trafficking in narcotics and dangerous drugs, conducting undercover operations where appropriate, and engaging in other traditional methods of investigation. This Resolution with authorize Chief Richard Vidaurri to execute a renewal of the agreement to continue our participation in this worthwhile program. RECOMMENDATION Staff recommends that the Mayor and Council adopt Resolution No. 2007-150, approving and authorizing the execution of the agreement with DEA to provide for continued participation in the program. ATTACHMENT(S) Agreement between MPD and DEA. SUGGESTED MOTION I move to adopt Resolution 2007-150. tOO005976.DOCI) CIH 812 810 7 Page I of I MARANA RESOLUTION NO. 2007-150 RELATING TO THE POLICE DEPARTMENT; APPROVING AND AUTHORIZING THE EXE- CUTION OF A TASK FORCE AGREEMENT BETWEEN MPD AND THE UNITED STATES DEPARTMENT OF JUSTICE, DRUG ENFORCEMENT ADMINISTRATION. WHEREAS evidence has shown that trafficking in narcotics and dangerous drugs exists in the Pima County area; and WHEREAS the United States Department of Justice, Drug Enforcement Administration has established a DEA Tucson Task Force whose mission is to investigate, prosecute and disrupt illicit drug trafficking in the State of Arizona; and WHEREAS the Town of Marana, through its Police Department and the United States De- partment of Justice, Drug Enforcement Administration desire to renew an agreement by which the Town will be able to continue to participate in the DEA Tucson Task Force; and WHEREAS, the Mayor and Council of the Town of Marana feel it is in the best interests of the public to renew this agreement. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, that the agreement between the Town of Marana and the United States De- partment of Justice, Drug Enforcement Administration, attached to and incorporated by this refer- ence in this resolution as Exhibit A is hereby approved, and the Chief of Police 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 of the intergovernmental agreement. PASSED, ADOPTED, and APPROVED by the Mayor and Council of the Town of Marana, Arizona, this 4th day of September, 2007. ATTEST: Mayor Ed Honea Jocelyn C. Bronson, Town Clerk APPROVED AS TO FORM: Frank Cassidy, Town Attorney (00005975.DOCI? CIH 08129107 TASK FORCE AGREEMENT BETWEEN DRUG ENFORCEMENT ADMINISTRATION AND MARANA POLICE DEPARTMENT This agreement is made this 301h day of September, 2007, between the United States Department of Justice, Drug Enforcement Administration (hereinafter "DEA"), and Marana Police Department (hereinafter "MPD"). WHEREAS there is evidence that trafficking in narcotics and dangerous drugs exists in the area and that such illegal activity has a substantial and detrimental effect on the health and general welfare of the people of the State of Arizona, the parties hereto agree to the following: The DEA Tucson Task Force will perform the activities and duties described below: a. disrupt the illicit drug traffic in the State of Arizona by immobilizing targeted violators and trafficking organizations; b. gather and report intelligence data relating to trafficking in narcotics and dangerous drugs; and, C. conduct undercover operations where appropriate and engage in other traditional methods of investigation in order that the Task Force's activities will result in effective prosecution before the courts of the United States and the State of Arizona. 2. To accomplish the objectives of the DEA Tucson Task Force, the MPD agrees to detail two experienced officers to the DEA Tucson Task Force for a period of not less than two years. During this period of assignment, the MPD Officers will be under the direct supervision and control of DEA supervisory personnel assigned to the Task Force. 3. The MPD Officers assigned to the Task Force shall adhere to DEA policies and procedures. Failure to adhere to DEA policies and procedures shall be grounds for dismissal from the Task Force. 4. The MPD Officers assigned to the Task Force shall be deputized as Task Force Officers of DEA pursuant to 21 U.S.C. 878. To accomplish the objectives of the DEA Tucson Task Force, DEA will assign a significant number of Special Agents to the Task Force. DEA will also, subject to the availability of annually appropriated funds or any continuing resolution thereof, provide necessary funds and equipment to support the activities of the 2008 Marana Police Department Task Force Agreement DEA Special Agents and Officers assigned to the Task Force. This support will include: office space, office supplies, travel ftinds, funds for the purchase of evidence and information, investigative equipment, training, and other support items. 6. During the period of assignment to the DEA Tucson Task Force, the MPD will remain responsible for establishing the salary and benefits, including overtime, of the officers assigned to the Task Force, and for making all payments due them. DEA will, subject to availability of ftinds, reimburse the MPD for overtime payments made by it to MPD officers assigned to the DEA Tucson Task Force for overtime, up to a sum equivalent to 25 percent of the salary of a GS-12, Step 1, (RUS) Federal employee (currently $15,854.25), per officer. 7. In no event will the MPD charge any indirect cost rate to DEA for the administration or implementation of this agreement. The MPD shall maintain on a current basis complete and accurate records and accounts of all obligations and expenditures of funds under this agreement in accordance with generally accepted accounting principles and instructions provided by DEA to facilitate on-site inspection and auditing of such records and accounts. 9. The MPD shall permit and have readily available for examination and auditing by DEA, the United States Department of Justice, the Comptroller General of the United States, and any of their duly authorized agents and representatives, any and all records, documents, accounts, invoices, receipts or expenditures relating to this agreement. The MPD shall maintain all such reports and records until all audits and examinations are completed and resolved, or for a period of three years after termination of this agreement, whichever is sooner. 10. The MPD shall comply with Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, the Age Discrimination Act of 1975, as amended, and all requirements imposed by or pursuant to the regulations of the United States Department of Justice implementing those laws, 28 C.F.R. Part 42, Subparts C, F, G, H, and 1. 11. The MPD agrees that an authorized officer or employee will execute and return to DEA the attached OJP Form 4061/6, Certification Regarding Lobbying: Debarment, Suspension and Other Responsibility Matters; and Drug-Free Workplace Requirements. The MPD acknowledges that this agreement will not take effect and no Federal funds will be awarded to the MPD by DEA until the completed certification is received. 2008 Marana Police Department Task Force Agreement 12. When issuing statements, press releases, requests for proposals, bid solicitations, and other documents describing projects or programs funded in whole or in part with Federal money, the MPD shall clearly state: (1) the percentage of the total cost of the program or project which will be financed with Federal money; and, (2) the dollar amount of Federal funds for the project or program. 13. The term of this agreement shall be from the date of signature by representatives of both parties to September 30, 2008. This agreement may be terminated by either party on thirty days' advance written notice. Billings for all outstanding obligations must be received by DEA within 90 days of the date of termination of this agreement. DEA will be responsible only for obligations incurred by MPD during the term of this agreement. For the Drug Enforcement Administration: ELIZABETH W. KEMPSHALL Special Agent in Charge For the Marana Police Department: RICHARD VIDAURRI Chief of Police Attachment Date Date 2008 Marana Police Department Task Force Agreement U.S. DEPARTMENT OF JUSTICE OFFICE OF JUSTICE PROGRAMS OFFICE OF THE COMPTROLLER CERTIFICATIONS REGARDING LOBBYING; DEBARMENT SUSPENSION AND , OTHER RESPONSIBILITY MATTERS; AND DRUG-FREE WORKPLACE REQUIREMENTS Applicants should refer to the regulations cited below to determine the certification to which they are required to attest. Applicants should also review the instructions for certification included in the regulations before completing this from. Signature of this form provides for compliance with certification requirements under 28 CFR Part 69, "New Restrictions on Lobbying" and 28 CFR Part 67, "Govern me n t-wide Department and Suspension (Nonprocurement) and Government-wide Requirements for Drug-Free Workplace (Grants)." The certifications shall be treated as a material representation of fact upon reliance will be placed when the Department of Justice determines to award the covered transaction, grant, or cooperative agreement. 1. LOBBYING public (Federal, State, or local) transaction or contract under a As required by Section 1352, Title 31 of the U.S. Code, and implemented at 28 CFR Part 69, for persons ente rin into a rant or coo erati t 1 ef public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft for ery, bribery, falsification or destruction of records, making Yase p ve agreemen over $ 00,000, as d ined at 8 CFR Part 69, the applicant certifies that: statements, or receiving stolen property; (a) No Federal a?propriate funds have been paid or will be aid, by or on b6 alf of the undersigned to any person for in- (c) Are not presently indicted for or otherwise criminally or - ' charged by a governmental ent?ty (Federal, State, or ci ivi l'6 ith F , I uencing or attempting to influence an officer or employee of o w a commission of any of the offenses enumerated in h any agency, a Member of Congress, an officer or employee of paragrap (1)(b) of this certification; and Congress, or an employee of a Member of Congress in con- nection with the making of any Federal grant, the entering into jo) Have not within a three-year period preceding this applica- ion had one or more public transactions (Federal State or of any cooperative agreement, and extension, continuation renewal, amendment, or modification of any Federal grant & , , local) terminated for cause or default; and cooperative agreement; B. Where the applicant is unable to certify to any of the (b any funds other than Federal appropriated funds have ee 'f statements in this certification, he or she shall attach an explanation to this application b n paid or will be paid to any person for influencing or at- . tempting to influence an officer or employee of any agency, a Member of Congress an officer or emp!oyee c ongress or 3 DRUG , , an employee of a Member of Congress in connection with this . -FREE WORKPLACE (GRANTEES OTHER THAN INDIVIDUALS) Federal grant or cooperative agreement, the undersigned shall conplete and submit Standard Form - LLL "Disclosure of Lobbying Activities," in accordance with its instr6ctions; As required by the Dru$Free Workplace Act of 1988, and implemented at 28 CFR art 67 S?bpart F for rantees as fc) The undersigned shall require that the language of this cer- ification be included in the award documents for all subaward , g defined at 28 CFR Part 67 S?ctions 67.615 and 67.620- s at all tiers (including subgrants, contracts under grants and cooperative agreements, and subcontracts) and that all sub- A The applicant certifies that it will or will continue to provide adrug-free workplace by: recipients sh?lrcertify and disclose accordingly. (a) Publishing a statement notifying employees that the - unlawful manufacture, distribution, dispensing, possession, or use f t ll d b ' 2. DEBARMENT SUSPENSION, AND OTHER RESPONSIBILIfi MATTERS o a con ro e su stance is prohibited in the grantee s workplace and specifyini the actions that will be taken against e l f i l i (DIRECT RECIPIENT) mp oyees or v o at on o such prohibition; As required by Executive Order 12549, Debarment and (b) Establishing an on-going drug-free awareness program to inform employees about- Suspension, and imp!emented at 28 CIFIR Prt 67, for prospec- tive participants in primary covered transactions, as defined at 28 CFR Part 67, Section 67.510- (1) The dangers of drugs abuse in the workplace; A. The applicant certifies that it and its principals: (2) The grantee's policy of maintaining a drug-free workplace; (a) Are not presently debarred, suspended, proposed for debar- (3) Any available drug counseling, rehabilitation, and employee assistance programs; and declared ineligible sentenced to a denial of Federal =its by a State or ?ederal court, or voluntarily excluded from covered transactions by any Federal de artment (4) The penalties that may be imposed upon employees for p or agency; drug abuse violations occurring in the workplace; (b) Have not within a three-year period preceding this applica- tion been convicted of or had a civil jydgment rendered against (c) MakinN it a requirement that each employee to be engaged in the pe ormance of the grant be given a copy of the state- t them for commission of fraud or a criminal offense in connec- men required by paragraph (a); tion with obtaining, attempting to obtain, or performing a (d) Notifying the employee in the statement required by para raph (a) that, as a condition of employment under the gran? the employee will- OJP FORM 4061/6 (3-91) REPLACES OJP FORMS 4061/2,4062/3 AND 4061/4 WHICH ARE OBSOLETE. (1) Abide by the terms of the statement; and (?) Notify the employer in writing of his or her conviction for a violation of a criminal drug statute occurring in the workplace no later than five calendar days after such conviction; (?) Notifying. the agency, in writing, within 10 calendar days atter receiving notice under subparagraVh (d)(2) from an employee or otherwise receiving actual no ice OT such convic- tion. Employers of convicted employees must provide notice including position title, to: Department of Justice, Office of Justice Programs, ATTN: Control Desk, 633 Indiana Avenue, N.W., Washington D C 20531. Notice shall include the iden- tification number(s? of'ea'ch affected grant; (f) Taking one of the following actions, within 30 calendar days of receiving notice under subparagraph (d)(2), with respect to any employee who is so convicted- (1) Taking appropriate personnel action against such an employee, up to and including termination consistent with the requirements of the Rehabilitation Act of 103, as amended; or (2) Requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforce- ment, or other appropriate agency; fg) Making a good faith effort to continue to maintain a drug- ree workplace through implementation of paragraphs (a), (b), (c), (d), (e), and (f). B. The grantee may insert in the space provided below the site(s) for the performance of work done in connection with the specific grant: Place of Performance (Street address, city, country, state, zip code) DEA TUCSON DISTRICT OFFICE 3285 East Hemisphere Loop Tucson, Arizona 857OG Check E] if there are workplace on file that are not identified here. Section 67, 630 of the regulations provides that a grantee that is a State may elect to make one certification in each Federal fiscal year. A copy of which should be included with each ap- plication for Department of Justice funding. States and State agencies may elect to use OJP Form 4061/7. Check [I if the State has elected to complete OJP Form 4061/7. DRUG-FREE WORKPLACE (GRANTEES WHO ARE INDIVIDUALS) As required by the Drug-Free Workplace Act of 1988, and implemented at 28 CFR Part 67, Subpart F, for grantees, as defined at 28 CFR Part 67; Sections 67.615 and 67.620- A. As a condition of the grant I certify that I will. not engage in the unlawful manufacture, distribution, dispensing, posses- sion, or use of a controlled substance in condition any activity with the grant; and B. If convinced of a criminal drug offense resulting from a violation occurring during the conduct of any grant activity I will report the conviction, in writing da' oe within 10 calendar ys of the conviction, to: Department Justice, Office of Justice Programs, ATTN: Control Desk, 633 Indiana Avenue, N.W., Washington, D.C. 20531. As the duly authorized representative of the applicant, I hereby certify that the applicant will comply with the above certifications. 1. Grantee Name and Address: MARANA POLICE DEPARTMENT 11555 West Civic Center Drive, Bldg. B Marana, Arizona 85653 2. Application Number and/or Project Name RICHARD VIDAURRI, CHIEF 3. Grantee IRS/Vendor Number 4. Typed Name and Title of Authorized Representative 5. Signature 6. Date TASK FORCE AGREEMENT BETWEEN DRUG ENFORCEMENT ADMINISTRATION AND MARANA POLICE DEPARTMENT This agreement is made this 3 01h day of September, 2007, between the United States Department of Justice, Drug Enforcement Administration (hereinafter "DEA"), and Marana Police Department (hereinafter "MPD"). VMEREAS there is evidence that trafficking in narcotics and dangerous drugs exists in the area and that such illegal activity has a substantial and detrimental effect on the health and general welfare of the people of the State of Arizona, the parties hereto agree to the following: The DEA Tucson Task Force will perform the activities and duties described below: a. disrupt the illicit drug traffic in the State of Arizona by immobilizing targeted violators and trafficking organizations; b. gather and report intelligence data relating to trafficking in narcotics and dangerous drugs; and, C. conduct undercover operations where appropriate and engage in other traditional methods of investigation in order that the Task Force's activities will result in effective prosecution before the courts of the United States and the State of Arizona. 2. To accomplish the objectives of the DEA Tucson Task Force, the MPD agrees to detail two experienced officers to the DEA Tucson Task Force for a period of not less than two years. During this period of assignment, the MPD Officers will be under the direct supervision and control of DEA supervisory personnel assigned to the Task Force. The MPD Officers assigned to the Task Force shall adhere to DEA policies and procedures. Failure to adhere to DEA policies and procedures shall be grounds for dismissal from the Task Force. 4. The MPD Officers assigned to the Task Force shall be deputized as Task Force Officers of DEA pursuant to 21 U.S.C. 878. To accomplish the objectives of the DEA Tucson Task Force, DEA will assign a significant number of Special Agents to the Task Force. DEA will also, subject to the availability of annually appropriated funds or any continuing resolution thereof, provide necessary funds and equipment to support the activities of the 2008 Marana Police Department Task Force Agreement DEA Special Agents and Officers assigned to the Task Force. This support will include: office space, office supplies, travel funds, funds for the purchase of evidence and information, investigative equipment, training, and other support items. 6. During the period of assignment to the DEA Tucson Task Force, the MPD will remain responsible for establishing the salary and benefits, including overtime, of the officers assigned to the Task Force, and for making all payments due them. DEA will, subject to availability of funds, reimburse the MPD for overtime payments made by it to MPD officers assigned to the DEA Tucson Task Force for overtime, up to a sum equivalent to 25 percent of the salary of a GS-12, Step 1, (RUS) Federal employee (currently $15,854.25), per officer. 7. In no event will the MPD charge any indirect cost rate to DEA for the administration or implementation of this agreement. 8. The MPD shall maintain on a current basis complete and accurate records and accounts of all obligations and expenditures of funds under this agreement in accordance with generally accepted accounting principles and instructions provided by DEA to facilitate on-site inspection and auditing of such records and accounts. 9. The MPD shall permit and have readily available for examination and auditing by DEA, the United States Department of Justice, the Comptroller General of the United States, and any of their duly authorized agents and representatives, any and all records, documents, accounts, invoices, receipts or expenditures relating to this agreement. The MPD shall maintain all such reports and records until all audits and examinations are completed and resolved, or for a period of three years after termination of this agreement, whichever is sooner. 10. The MPD shall comply with Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, the Age Discrimination Act of 1975, as amended, and all requirements imposed by or pursuant to the regulations of the United States Department of Justice implementing those laws, 28 C.F.R. Part 42, Subparts C, F, G, H, and 1. 11. The MPD agrees that an authorized officer or employee will execute and return to DEA the attached ON Form 4061/6, Certification Regarding Lobbying: Debarment, Suspension and Other Responsibility Matters; and Drug-Free Workplace Requirements. The MPD acknowledges that this agreement will not take effect and no Federal funds will be awarded to the MPD by DEA until the completed certification is received. 2008 Marana Police Department Task Force Agreement 12. When issuing statements, press releases, requests for proposals, bid solicitations, and other documents describing projects or programs funded in whole or in part with Federal money, the MPD shall clearly state: (1) the percentage of the total cost of the program or project which will be financed with Federal money; and, (2) the dollar amount of Federal funds for the project or program. 13. The term of this agreement shall be from the date of signature by representatives of both parties to September 30, 2008. This agreement may be terminated by either party on thirty days' advance written notice. Billings for all outstanding obligations must be received by DEA within 90 days of the date of termination of this agreement. DEA will be responsible only for obligations incurred by MPD during the term of this agreement. For the Drug Enforcement Administration: ELIZABETH W. KEMPSHALL Special Agent in Charge For the Marana Police Department: RICHARD VIDAURRI Chief of Police Attachment Date Date 2008 Marana Police Department Task Force Agreement U.S. DEPARTMENT OF JUSTICE OFFICE OF JUSTICE PROGRAMS OFFICE OF THE COMPTROLLER CERTIFICATIONS REGARDING LOBBYING; DEBARMENT, SUSPENSION AND OTHER RESPONSIBILITY MATTERS; AND DRUG-FREE WORKPLACE REQUIREMENTS Applicants should refer to the regulations cited below to determine the certification to which they are required to attest. Applicants should also review the instructions for certification included in the regulations before completing this from. Signature of this form provides for compliance with certification requirements under 28 CFR Part 69, "New Restrictions on Lobbying" and 28 CFR Part 67, "Governme nt-wide Department and Suspension (Nonprocurement) and Government-wide Requirements for Drug-Free Workplace (Grants)." The certifications shall be treated as a material representation of fact upon reliance will be placed when the Department of Justice determines to award the covered transaction, grant, or cooperative agreement. 1. LOBBYING public (Federal, State, or local) transaction or contract under a As required by Section 1352, Title 31 of the U.S. Code, and public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft for ry implemented at 28 CFR Part 69, for persons enterin into a rant or coo erative a reement over $100 000 defi d t e , bribery, falsification or destruction of records, making Tase g , , as ne a 98 CFR Part 99, the applicant certifies that: statements, or receiving stolen property; (a) No Federal appropriate funds have been paid or will be Faid, by or on behalf of the undersigned, to any person for in- luencing or attempting to influence an officer or employee of (c) Are not presently indicted for or otherwise criminally or civ"116 charged by a governmental entity (Federal, State, or loca with commission of any of the offenses enumerated in h 1 b f any agency, a Member of Congress, an officer or employee of paragrap ( )( ) o this certification; and Congress, or an employee of a Member of Congress in con- nection with the making of any Federal grant, the entering into jo) Have not within a three-year period preceding this applica- ion had one or more public transactions (Federal State or of any cooperative agreement, and extension, continuation renewal, amendment, or modification of any Federal grant oi? , , local) terminated for cause or default; and cooperative agreement; B. Where the applicant is unable to certify to any of the (b any funds other than Federal appropriated funds have ) 'f statements in this certification, he or she shall attach an explanation to this application. be en paid or will be paid to any person for influencing or at- tempting to influence an officer or employee of any agency, a Member of Congress an officer or employee c on ress or 3 D , g , an employee of a Member of Congress in connection with this . RUG-FREE WORKPLACE (GRANTEES OTHER THAN INDIVIDUALS) Federal grant or cooperative agreement, the undersigned shall complete and submit Standard Form - LILL "Disclosure of n' Lobbying Activities," in accordance with its instr?ctions; As required by the Dru$Free Workplace Act of 1988, and implemented at 28 CFR art 67 S b art F f t (c) The undersigned shall require that the Ian uage of this cer fification be included in the award documentsior all subawards y p , or gran ees as defined at 28 CFR Part 67 S?ctions 67.615 and 67.620- at all tiers (including subgrants, contracts under grants and A The applicant certifies that it will or will continue to provide a *drug-free workplace by: cooperative a reements, and subcontracts) and that all sub- i i t h l? f rec p en s s a certi y and disclose accordingly. (a) Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession, or ' 2. DEBARMENT SUSPENSION, AND OTHER RESPONSIBILIfi MATTERS use of a controlled substance is prohibited in the grantee s workplace and specifyini the actions that will be taken against l f (DIRECT RECIPIENT) emp oyees or violation o such prohibition; As required by Executive Order 12549, Debarment and (b) Establishing an on-going drug-free awareness program to inform employees about- Suspension, and imp!emented at 28 CFR Prt 67, for prospec- tive participants in primary covered transactions, as defined at 28 CFR Part 67, Section 67.510- (1) The dangers of drugs abuse in the workplace; A. The applicant certifies that it and its principals: (2) The grantee's policy of maintaining a drug-free workplace; (a) Are not presently debarred, suspended, proposed for debar- (3) Any available drug counseling, rehabilitation, and employee assistance programs; and declared ineligible sentenced to a denial of Federal =its by a State or ?ederal court, or voluntarily excluded from covered transactions by any Federal de artment (4) The penalties that may be imposed upon employees for p or agency; drug abuse violations occurring in the workplace; jP) Have not within a three-year period preceding this applica- (c) MakinN it a requirement that each.employee to be engaged in the pe ormance of the grant be given a copy of the state- ion been convicted of or had a civil jqdgment rendered against them for commission of fraud or a criminal offense in connec- ment required by paragraph (a); tion with obtaining, attempting to obtain, or performing a (d) Notifying the employee in the statement required by para raph (a) that as a conditi f l t , on o emp oymen under the ran? the l ill g emp oyee w - OJP FORM 4061/6 (3-91) REPLACES OJP FORMS 4061/2,4062/3 AND 4061/4 WHICH ARE OBSOLETE. (1) Abide by the terms of the statement; and (?) Notify the employer in writing of his or her conviction for a violation of a criminal drug statute occurring in the workplace no later than five calendar days after such conviction; (e Notifying. the agency, in writing, within 10 calendar days apler receiving notice under subparagrgh (dl)(2) from an emplo ee or otherwise receiving actual no ice o such convic- tion. Kmployers of convicted employees must provide notice including position title to, Department of Justice, Office of Justice Programs, A?QN: 'Control Desk, 633 Indiana Avenue, N.W., Washington D C 20531. Notice shall include the iden- tification number(s? of'ea*ch affected grant; (f) Taking one of the following actions, within 30 calendar days of receiving notice under subparagraph (d)(2), with respect to any employee who is so convicted- (1) Taking appropriate personnel action against such an employee, Up To and including termination consistent with the requirements of the Rehabilitation Act of 103, as amended; or (2) Requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforce- ment, or other appropriate agency; fg) Making a good faith effort to continue to maintain a drug- ree workplace through implementation of paragraphs (a), (b), (c), (d), (e), and (f). B. The grantee may insert in the space provided below the site(s) for the performance of work done in connection with the specific grant: Place of Performance (Street address, city, country, state, zip code) DEA TUCSON DISTRICT OFFICE 3285 East Hemisphere Loop Tucson, Arizona 85706 Check D if there are workplace on file that are not identified here. Section 67, 630 of the regulations provides that a grantee that is a State may elect to make one certification in each Federal fiscal year. A copy of which should be included with each ap- plication for Department of Justice funding. States and State agencies may elect to use OJP Form 4061/7. Check E] if the State has elected to complete OJP Form 4061/7. DRUG-FREE WORKPLACE (GRANTEES WHO ARE INDIVIDUALS) As required by the Dru$Free Workplace Act of 1988, and implemented at 28 CFR art 67, Subgart F, for grantees, as defined at 28 CFR Part 67; Sections 67. 15 and 67.620- A. As a condition of the grant I certify that I will. not engage in the unlawful manufacture distribution, dispensing, posses- sion, or use of a controlled substance in condition any activity with the grant; and B. If convinced of a criminal drug offense resulting from a violation occurring during the conduct of any grant activity I will report the conviction, in writing da' of, within 10 calendar ys of the conviction, to: Department Justice, Office of Justice Programs, ATTN: Control Desk, 633 Indiana Avenue, N.W., Washington, D.C. 20531. As the duly authorized representative of the applicant, I hereby certify that the applicant will comply with the above certifications. 1 . Grantee Name and Address: MARANA POLICE DEPARTMENT 11555 West Civic Center Drive, Bldg. B Marana, Arizona 85653 2. Application Number and/or Project Name 3. Grantee IRS/Vendor Number RICHARD VIDAURRI, CHIEF 4. Typed Name and Title of Authorized Representative 5. Signature 6. Date MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: JULY 24,2007 PLACE AND DATE Marana Municipal Complex A. CALL TO ORDER AND ROLL CALL By Mayor Honea at 7:00 p.m. COUNCIL Ed Honea Mayor Herb Kai Vice Mayor Russell Clanagan Council Member Patti Comerford Council Member Tim Escobedo Council Member Carol McGorray Council Member Roxanne Ziegler Council Member STAFF Mike Reuwsaat Town Manager Gilbert Davidson Deputy Town Manager Jim DeGrood Assistant Town Manager Frank Cassidy Town Attorney Jocelyn Bronson Town Clerk Present Present Excused Present Present Present Present Present Present Present Present Present B. PLEDGE OF ALLEGIANCE AND INVOCATION/MOMENT OF SILENCE Led by Mayor Honea. C. APPROVAL OF AGENDA Upon motion by Council Member McGorray, seconded by Vice Mayor Kai, the agenda was unanimously approved. D. CALL TO THE PUBLIC E. PRESENTATIONS 1. Presentation on proposed Special Events Ordinance (Jim DeGrood) Mr. DeGrood addressed Council and stated the town hosts a variety of events from bicycling racing to events in the park, concerts. These typically receive special events permits from the town. One of the challenges is they have noticed that they do not have as much authority to regulate these special events as they thought and as such, staff convened a committee to work on a special events ordinance. That committee consisted of representatives from police, public works, parks and recreation, town attorney's office, town clerk and town managerls office. They have put together a draft of the special events ordinance. They have attempted to put together a definition for special events that reads any public or private function that has a number of different conditions that are met. These conditions include requiring temporary parking, if its held in a public park, if it has amplified music or voices that can be heard I MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: JULY 24,2007 outside of the event location, if it requires temporary traffic control, requires a special event liquor license, requires temporary sanitation facilities, if it involves the installation of temporary sanitation facilities, if it involves the installation of temporary structures or tents that are greater than a 120 sq. ft. or it has other adverse impact on public health, safety or welfare. They added to the requirements for the permit a series of exemptions and these exemptions are any school functions held at school facilities unless there is spill over anticipated and ordinary and customary events at a venue designed to accommodate them. The ordinance includes three definitions, one for the special event, one for a major event which is one that requires security services and traffic control and a definition for spill over. Vice Mayor Kai asked if it would be prudent to set a number on the event. That if the event has such a number it is considered a special event. Mr. DeGrood stated they looked at ordinances across the state. Some regulate as low as 50 people. He stated he thought that was extreme and excessive. They looked at 500, but as they went through it they struggled that there may be instances where they need to look at a different threshold. It was very difficult for them to establish that. They looked at the exemption of identifying venues that have the capacity to handle the event. They are not recommending a number. The ordinance contains an application procedure. It includes conditions and they have identified conditions for noise, sanitation, security, medical services, lighting, parking, traffic control, ensuring they have appropriate zoning and the signage is per land development code, sales and insurance. The ordinance also includes grounds for denial, waivers and violations and penalties. Noise is a common concern. They used the resort and recreation zone standards. They are not requiring'a specific number as far as sanitation, but they need to be adequate and they can work with the vendors to provide that. Under security they give latitude to the Chief of Police to identify when additional security is going to be needed or required as a condition of a special event permit. They need to consider the nature of the pen-nit. They need to consider the anticipated attendance and whether alcohol would be present and whether there would be any ticket or money handling. On medical services they would have to consult with the police and Northwest Fire Rescue. Regarding lighting if it is after dark and there has to be adequate illumination. There has to be adequate parking for the anticipated crowd without spill over. They also require dust control. On signage and zoning they refer to the land development code. Sales have been a concern of the finance department because they find the vendors aren't reporting their sales and aren't collecting sales tax and the same goes for ticket sales. One other element is that they are telling the applicants that they cannot sell tickets to an event until they have their permit. The insurance requirement is a million general liability insurance with the town name is an insured or as recommended by the Arizona Municipal Risk Retention Pool if they have reason to recommend a higher limit. In terms of penalties there is a distinction, one is a civil infraction and the other constitutes a misdemeanor. Upon motion by Council Member Ziegler, seconded by Council Member McGorray, direct staff to bring Ordinance back for final adoption was unanimously approved. 2 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: JULY 24,2007 2. Presentation on the Marana Municipal Court reorganization project (Cedric Hay) Mr. Hay addressed Council and stated in February, 2007, the Arizona Supreme Court through its administrative office of the courts issued a directive which was intended to help judges, court staff and city officials resolve the most common issues involving the relationship between the municipal court and other parts of the city or town government. The directive consisted of 29 questions that were broken into five specific areas. The areas are supervision and management, budget and finances, personnel, facilities and records. In applying these answers that they provided to our town code, specifically Title 5, which establishes the municipal court, we are in compliance with most of their directives already. It was found that Chapter 5-3 which establishes the court administration department and the position of court administrator had this position answering to and being appointed by the town manager. According to the Supreme Court "employees of the court must be under the direct control and supervision of the presiding officer of each court." The court acknowledged "that the court should maintain its independence from the executive and legislative branches. This should be accomplished in a cooperative manner.- The legal department has done additional research, spoken with court personnel and traveled with the town manager to speak with representatives of the administrative office of the courts in Phoenix. The changes to the code should be brought back before Council in late August. The administrative office of the Supreme Court offered services and a program called CourTools. This was created by the National Center for State Courts and if asked they are willing to help us apply this procedure. This is an evaluation process that is based on ten core performance measures. They handle the evaluation process. They conduct the service and give us the results of what they deterniiiie. F. MAYOR AND COUNCIL REPORTS: SUMMARY OF CURRENT EVENTS Council Member Ziegler stated there were about 40 people that came and attended the County Board of Supervisors meetiiig to support the town. She thanked Mary and Linda from Caliber. Council Member McGorray thanked everyone for their participation at the Board of Supervisors meeting. Mayor Honea stated they have put in a lot hours in meetings trying to talk to the public, business people and elected officials to make sure everyone knows what we are doing. G. MANAGER'S REPORT: SUMMARY OF CURRENT EVENTS H. STAFF REPORTS 3 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: JULY 24,2007 GENERAL ORDER OF BUSINESS 1. CONSENT AGENDA 1. Resolution No. 2007-130: Relating to Building; authorizing the renewal of an intergovernmental agreement between the Town of Marana and the Office of Manufactured Housing within the Arizona Department of Fire, Building and Life Safety (Cedric Hay) 2. Minutes of the June 26, 2007 and July 10, 2007 special meetings. 3. Resolution 2007-131: Relating to real estate; approving and authorizing the Director of Public Works to execute certain Sewer Easements that the Developer inadvertentlyfailed to reserve when dedicating portions ofSaguaro Springs to the Town ofMarana and to reserve an electric easementfor public andprivate use. Council Member Escobedo declared a conflict of interest on item #3. Upon motion by Council Member Comerford, seconded by Council Member McGorray, the Consent Agenda was unanimously approved. J. COUNCIL ACTION K. BOARDS, COMMISSIONS AND COMMITTEES L. ITEMS FOR DISCUSS ION/POS SIBLE ACTION 1. Discussion1possible action concerning the status of negotiations with Pima County relating to the termination of the 1979 intergovernmental agreement between Pima County and the Town ofMarana relating to sewer service within the Marana area. Mr. Reuwsaat thanked the community for supporting the town at the Board of Super-visors meeting. Their goals were to ask the Board of Supervisors not to approve the actions on the agenda and to work towards a negotiation process and they've added fifty percent. The county decided to designate the Marana waste water treatment plant as a park allowing the county of opt out of any Marana annexation. The town will now challenge, if Council approves, that designation by moving forward with the annexation of the Marana waste water treatment facilities. We are planning to build our own treatment facility to handle the current and future needs of the northwest area because the Luckett Road facility is only a small, temporary facility and it is in a location that cannot handle Marana's growing needs. The Board of Supervisors talked today about regionalism. Mr Reuwsaat stated unified county control of a countywide sewer system is not true regionalism. True regionalism is like the RTA style entity with multiple entities sharing in governance where a regional authority 4 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: JULY 24,2007 comprised of all local governments that provide water and waste water service controls and operates a combined area wide water and waste water system. That is how we would define waste water and water in terms of regionalism putting into the context of the RTA and TREO, not really the county controlled and owned sewer system. Marana is advocating control of the Marana waste water treatment facilities to keep water costs reasonable for its residents. Marana is the logical place for regional growth. Marana has ample and ideal land, previously developed available for businesses, industry and homes. Marana is in the Sunbelt corridor between Tucson and Phoenix. Development will occur in the future along this corridor as has been proven throughout the nation when you have similar corridors. We know that it is our responsibility to expect that there will be growth and development along that corridor, but to carefully plan for the resources that are necessary to meet the needs of that. Marana is pursuing the ownership of the sewer system for all of these reasons. Mr. Cassidy stated that as part of this item he would ask for several specific authorizations to move forward. The first is authorization to prepare a letter for the mayor's signature which would be sent to the chair of the Board of Supervisors with copies to other board members and other interested parties. This letter would lay out tile Town's proposed negotiation strategy. It would respond to some of the statements that were made today to correct the record and lay out our position on some of those items. The letter would be to expressly authorize the county to continue to provide sewer service within the town and to collect all sewer user fees for that service until the town has its facilities up and running and able to take over those processes. He stated he is asking for the expressed authorization because of statements by Mr. Huckleberry to the hon-iebuilders indicating that after the six months the authorization to continue serving is up in the air and therefore scared the homebuilders into thinking that they're going to allow no further hookups. This would make it very clear the county does have the authorization to continue to serve until the point that we are in a position to serve. Upon motion by Council Member Comerford, seconded by Council Member McGorray, the item was unanimously approved. Mr. Cassidy stated at today*s Board of Supervisors meeting Board Member Sharon Bronson read a letter from Ned Norris of the Toliono O'Odharn Nation in which Mr. Norris raised some concerns about the effects that the town's action of terminating the IGA might have relative to the Southern Arizona Water Rights Settlement Act. Mr. Cassidy stated they would like authorization to prepare a letter for the mayor's signature to Ned Norris and the Toliono O'Odham Nation explaining that for the geographic area, the basin which was the subject of the Indian Water Rights litigation for that area the Town of Marana is committed to and will set aside its proportionate share of those waters. Mr. Cassidy referred to the basin map. Upon motion by Council Member Escobedo, seconded by Vice Mayor Kai, the item was unanimously approved. Mr. Cassidy stated staff is requesting authorization to prepare a letter for the mayor's signature to the City of Tucson explaining the town's position relative to the Dove Mountain and Continental Ranch area systems. The statement was made this morning that if by terminating the agreement if the town ends up taking those systems that since those areas are 5 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: JULY 24,2007 served primarily by the City of Tucson that the town would actually be appropriating the city's affluent from those areas. The intention of this letter would be to reaffirm that within the basin we are committed to setting aside the SAWARSA portion of the effluent for the tribes. The second part is to say that even though Arizona law would allow the town to keep the affluent once it operates a treatment facility for that area that the town is committed to water in, water out which means that the water provider that provides the water that comes back through the sewer system we agree that that water provider should take ownership of that affluent and that would be subject to them paying the costs of treating that water. We would offer that to the city provided they recognize that the town has that same right with respect to water that is now going into the Ina Road treatment plant. Right now the City of Tucson has not been willing to sign an agreement giving the tOWD its portion of water that it provides through the Marana Water Department that ends up in the Ina Road treatment plant. The reason they haven't is they do not want to deal with that separately from the Marana plant. We want authorization to prepare this letter to make clear the town's intentions relative to water coming out of the Dove Mountain and Continental Ranch system. Upon motion by Council Member Escobedo, seconded by Vice Mayor Kai, the item was unanimously approved. Mr. Cassidy stated the last item is with respect to the county's action this morning to designate the Marana treatment facility and its surrounding areas as a park which the town believes is intended to block us from annexing the area. In response to that we do not believe that park designation is valid. Mr. Cassidy is asking the town be authorized to pursue an annexation that includes the Marana Waste Water Treatment Plant. Upon motion by Council Member Comerford, seconded by Council Member McGorray, the item was approved 5-0 with Vice Mayor Kai abstaining. M. EXECUTIVE SESSIONS. Upon motion by Council Member Escobedo, seconded by Vice Mayor Kai, Council convened to Executive Session. N. FUTURE AGENDA ITEMS 0. ADJOURNMENT Upon motion by Council Member Escobedo, seconded by Council Member McGorray, Council voted to adjourn. 6 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: JULY 24,2007 CERTIFICATION I hereby certify that the foregoing are the true and correct minutes of the Marana Town Council meeting held on July 24, 2007. 1 further certify that a quorum was present. Jocelyn C. Bronson, Town Clerk 7 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: August 14, 2007 PLACE AND DATE Marana Municipal Complex A. CALL TO ORDER AND ROLL CALL, By Mayor Honea at 6:00 p.m. COUNCIL Ed Honea Mayor Present Herb Kai Vice Mayor Present Russell Clanagan Council Member Present Patti Comerford Council Member Excused Tim Escobedo Council Member Present Carol McGorray Council Member Present Roxanne Ziegler Council Member Present STAFF Mike Reuwsaat Town Manager Present Gilbert Davidson Deputy Town Manager Present Assistant Town Manager Frank Cassidy Town Attorney Present Jocelyn Bronson Town Clerk Present B. PLEDGE OF ALLEGIANCE AND INVOCATIONIMOMENT OF SILENCE Led by Mayor Honea. C. APPROVAL OF AGENDA Upon motion by Council Member Escobedo, seconded by Vice Mayor Kai, the agenda was unanimously approved. D. CALL TO THE PUBLIC E. PRESENTATIONS 1. Presentation relating to Annexations (Kevin Kish) Mr. Kish addressed Council and stated currently the town is processing two annexations. The Pima Fanns annexation was presented to Council at the March 6, 2007 meeting. This property is located south of Pima Farms Road east of 1-10. The applicant is proposing to annex the property and then create an industrial development. The second pending annexation is the Trico Marana annexation which is approximately 1,550 acres located east of Trico, north of Trico Marana and south of Hardin Road. This was discussed at the Council meetings of July 17 th and 24 th . The public hearing is scheduled for 1h August 24 . Staff has been contacted by a mining company that is looking at approximately 178 acres which is outside of the town boundaries currently. They are looking at potential surface mining. They would need to annex the I MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: August 14, 2007 178 acres of the project area into the town for us to consider moving forward with any project in that area. There is also Avra Valley annexation which north of Avra Valley Road, east of Trico Road. They are working on an economic development analysis. Additional annexations that have had preliminary discussions are Avra Valley Road/1-10. It is at the Avra Valley interchange on the south side. The applicant had previously withdrawn and was pursuing development within Pima County. They have since contacted us to start preliminary discussions. The original concept was a commercial/industrial development. With the Twin Peaks interchange there is the area known as the bow tie. Once the interchange gets underway or shortly after there will probably be a proposal to Council for further direction on moving forward to eliminate that county island and bringing that into the town's jurisdiction by an annexation. There are two other county islands areas; Happy Acres which is south of Avra Valley, east of Airline Road and La Porta del Norte area that will be looked into bringing into the town to try and get rid of some of the county islands. Council Member Escobedo asked in reference to the county islands, what about Rillito and Arizona Portland Cement. Mr. Kish stated we would need to look at that whole area to see what might be feasible in terms of annexation, how the property owners feel and whether they want to move forward in partnership with us or not. Mr. Reuwsaat stated in Happy Acres there are people in the neighborhood that want to be in annexation process. It will need to be community driven. Mayor Honea stated the biggest islands in the town are the communities of Rillito, Happy Acres, Jackson Flatts and La Porta del Norte. He stated he would like to see Rillito in the town, but the problem was the citizens in Rillito didii't want to be in the town. The people in Happy Acres were split pretty evenly, but not enough to follow through. If we do La Porta del Norte so the middle school can be built then it is in the town and it makes it an easier process since that's between Avra Valley and Continental Ranch. We could do La Porta del Norte and Happy Acres at the same time since that is a piece there by itself Jack Neubeck addressed Council and stated they are representing an owner of approximately 120 acres which is east of Trico Road. They have been in discussion for a year and a half with the town the possibility of annexing. They had an economic analysis done. The sales tax that would be generated annually on the 120 acres would be with the lease tax a total of 354,960. Over the 2,240 acres that would be approximately seven million dollars yearly in sales and lease tax. The impact fees would be 1,323,000. The construction sales tax would be 1,569,000. The construction sales tax would be over 30 million on the entire parcel. They have agreed to do improvements to the 2 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: August 14,2007 town's water system at great expense of approximately $750,000. They would like to donate an acre of the 120 acres to the town for fire and/or police annex. He stated there are about 14 property owners in this annexation. Mr. Reuwsaat stated this area is way out, nothing close to it, no infrastructure. It is a residential development with a little bit of retail. He stated when we are trying to stay close to existing development where the utilities are etc. that the manager's recommendation at this point in time is not to proceed with this. From a resource standpoint in terms of how we are going to be able to manage our resources over the long run it is not an area he believes is ripe. He stated there are thousands of acres between that and where we currently have any existing development. Mr. Neubeck stated that the town was having difficulties with the state land around the airport. He stated this land is ripe for development and you don't have to deal with the state trust to get. It is fee simple land. He stated if the airport is going to be developed and want to have ancillary uses around the airport he thinks this is an appropriate annexation to pursue. He stated his client is willing to improve the infrastructure. He stated if there was development then it would promote getting the sewer built quicker. 2. Presentation on the Uptown at Marana Specific Plan (Paul Popelka) Mr. Popelka addressed Council and stated this is located along Marana Road, west of I- 10. It is a 205 acre property. This is primarily a commercial project, but it is a rnix of different types of commercial and different types of residential. The eastern area is an auto oriented, larger scale commercial area. To the soutli is some additional commercial related to the regional development, sorric neighborhood commercial in the center. The southwest area is intended for mixed use. The mixed use includes multi-family or apartment uses. The higher density includes different kinds of housing types. The northwest part of the project is intended for a lower scale low to medium density residential. Jordan Rose with Rose Law Group addressed Council on behalf of J.F. Companies with additional representatives from the engineering and architectural fin-n. She stated 117 out of 188 acres are commercial, 67 residential and 21 percent of the residential is open space. There are four and half miles of trails that connect the residential and retail. They want it to be a walk able urban neighborhood. The idea is to offer a variety of housing types. They have 29 acres of mixed use and 8 acres of neighborhood commercial. They have a fitness trail that goes around the perimeter of the site and a variety of trails so every residence is within a short distance of a trail where they can then walk to the amenities. The developer will be required to do regional improvements and Sanders Road to four lanes and Marana Road to six lanes. She stated the commercial will develop prior to the residential. The main commercial is separated from the single family. 3 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: August 14, 2007 Upon motion by Council Member McGorray, seconded by Council Member Ziegler, that the proposed Specific Plan and Development Agreement be scheduled for Council consideration at a Public Hearing at a future meeting was unanimously approved. 3. Presentation by the Organizational Culture and Values Committee (OCVC) on the Employee Core Values and Code of Ethics (Josh Wright) Mr. Wright addressed Council and stated the goals of the OCVC was to develop a set of core values based on employee input and to work with those values and create a statement of ethics or a code that went along with those values. They developed a survey for the employees, basically a list of a number of value type statements. There were 50 to 100 general type statements and the employees were asked to rank them. They received 226 surveys back. After analysis they used the top ten values. The committee is comprised of members of every department in the town. They came up with an acronym of ethics; excellence, teamwork, honesty, integrity, community and service. They developed in a committee a set statement for each value. The first is excellence. Marana prides itself on being an example of excellence. We strive to maintain the highest morale principals and values to ensure the public trust and our commitment to respond to their needs. Teamwork; we work together toward common goals building on each others strengths. Honesty; we are sincere and truthful in our interaction with the general public and with each other. Integrity; we place the public's welfare above all other interests and recognize that the chief function of government is to assist all of its citizens fairly. Community; we will partner with our citizens to make Marana a great place to live, work and play. Service; we will display courtesy, respect and responsiveness when meeting the community's needs. They are working on doing some marketing with this. They have developed some placards indicating the values that can be placed in employee work areas. They have relayed the results back to employees and gotten back positive feedback. 4. Presentation relating to Storm Water; update to the revised Town of Marana Storm Water Management Program (Barbara Johnson) Ms. Johnson addressed Council and introduced Corby Lust. Ms. Lust addressed Council regarding some of the changes made to the storm water management program in response to an audit in May, 2006. The formal name is Arizona Pollutant Discharge Elimination System and it is administered by the Arizona Department of Environmental Quality. It is a federal program. The town is a designated, regulated small municipal separate storm sewer system. We have to implement the storin water program as part of a general permit requirement. The first draft was sent to ADQ in March, 2003. They received comments back from ADQ in 2005 and sent 4 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: August 14, 2007 them another draft in October, 2005. Council adopted the original plan in 2006. In May, 2006 the EPA along with ADQ came to the town to evaluate our program and how we were meeting the requirements of the program. In September, 2006, recommendations from the EPA were received with how we can improve our program. There are six minimum control measures they look at; public outreach and education, public involvement and participation, elicit discharge, detection and elimination, construction site runoff, post construction, ston-n water controls, pollution prevention, and good housekeeping for municipal operations. One of the recommendations for public outreach was to provide a little more general information so that if we were to be re-evaluated that we would not be violating the permit if the brochures were not in specific locations. For public involvement and participation they originally put in the adopt a neighborhood program which wasn't met with a lot of success and they replaced that with the adopt a wash program which they coordinate with the operations and maintenance department. On elicit discharge and elimination they had originally put in spills as an allowable discharge into our streets, washes, etc and that was a potential pen-nit violation so that was removed. For construction site runoff, one of the things was how we were going to be inspecting our construction sites for compliance with the construction general permit which is another piece of this program. They committed to inspecting each construction site during its active period at least once. For post construction site, storm water runoff there were no major modifications and no recommendations. For pollution prevention, good housekeeping for municipal operations they updated the training program that we offer for our employees and provided some additional information in that area. They will be bringing the plan back September 0' for adoption. They also will be presenting at that time a presentation of the storm water ordinance which is currently in the legal department for review. 5. Presentation relating to Floodplain Management; FEMA policy regarding accreditation of levees and the resulting floodplain determinations behind them (Keith Brann) Mr. Brann addressed Council and stated they received a letter from FEMA (Federal Emergency Management Agency) regarding the status of what they consider levees in the town. When the town thinks of a levee we think of the Santa Cruz levee, the lower Santa Cruz levee which extends from south of Avra Valley Road up to Sanders Road. That levee was constructed by Pima County Flood Control District. It was constructed per levee requirements. Pima County obtained a LOMAR for that levee. The town obtained a subsequent LOMAR and just recently a developer also did an increased study on the effects of that levee. That levee removed essentially most of the northwestern Marana from the Pima Flood Plain where the source of the flooding with the Santa Cruz River. LOMAR (Letter of map revision) is a process by which anyone can petition FEMA to revise the FIRM (flood information rate map) which is what tells people whether they are in a flood 5 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: August 14, 2007 plain which requires the purchase of flood insurance. FEMA has identified the areas in the country where the risk is high enough that they require flood insurance for any mortgage that is from a federally regulated lending institution. The PAL letter (Provisionally Accredited Levee) is where FEMA has identified features that they think act like levees therefore, the flood rate maps from the past decades have utilized these features to provide protection to people and show that they are not in a high risk flood plain. FEMA has taken the stance in the wake of Hurricane Katrina to say that nothing is a levee until it has been constructed to levee standards and maintained as a levee. What FEMA intends to do is remap the entire country based on this policy. If a feature was not constructed like a levee or maintaMed they will take out any protection that levee provides. In general, levees require three foot of freeboard above calculated water surface elevations. They must be constructed with sound engineering principals. They have to be annored. General fill is not a levee standard. They have to have internal drainage devices and resistance to seepage. Openings in levees must be able to be closed and any water trapped behind the levy must be able to be drained out or pumped out which is also part of the problems with HutTicane Katrina. FEMA requires regular maintenance of these facilities and it has to be done per an adopted maintenance plan. As far as these requirements go only items that were constructed as levees can generally meet these requirements. In the PAL letter the town received from FEMA they identified several features that they consider acting as levees that they want us to show that they are actually levees. Mr. Braunn discussed the contents of this letter. We had flood insurance rate maps that came out in 1999 that generated most of our flood plain for ffie town. Since then we have had several letters of map revision, mainly the lower Santa Cruz levee. If this policy of FEMA comes through they will take away the protection and the letters of map revisions that the developments have gained and they would remap it back into the flood plain where it was. As FEMA moves towards requiring accreditation and then de- accrediting features that cannot meet what the impact to the town will be the area betweeii the CAP canal and 1-10 essentially will be zoned as a zone A flood plain possibly even some zone AE. Zone A is an indeterminate flood plain. FEMA says you're in one and we don't know what it is and it is up to municipalities and further studies to further define it. AE flood plain is for a river flood plain which is the Santa Cruz flood plain. That type of flood plain has base flood elevations from the water surfaces given. New developments will no longer be able to use the CAP canal as a means of securing a letter of map revision. The zone A flood plain could extend and likely will extend beyond I- 10. FEMA has not given the town the maps to actually show what is going to happen. They say they will give them to us by September 201h . There are flood insurance implications for people who are pulled back into the flood plain and who have a federally regulated mortgage lending company. Currently, anyone who is in a zone X flood plain and has no claims for flood can secure $200,000 of home protection and $80,000 of contents, preferred rate means you're in zone X when you renew your policy and you have no claims. The next step is zone X flood insurance where you have had claims 6 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: August 14, 2007 against the policy or you are no longer in zone X, but you've built in zone X. The indeterminate polices that FEMA has are the zone A. Zone A has no water surface elevations. The municipality, the town, can deten-nine those elevations and we would do that through drainage reports from the developments. We could regulate that way and we could certify through engineers giving elevation certificates. We could then secure people the best insurance they could get. By October l8th communities must supply FEMA with the PAL agreement saying that yes, we have a levee and we know it is a levee and we don't have all our information together, but we will get it to you. As part of that information they are looking for is the engineering. You have to have your maintenance plan adopted and show maintenance records for that feature. If you think you have a levee and know you have some deficiencies in it you can work with FEMA to get a year to make those improvements. At the end of two years FEMA will rernap everything. If you cannot make those benchmarks then FEMA remaps within one year. We are going to provide FEMA information to accredit the lower Santa Cruz levee through Pima County Regional Flood Control District and they are going to provide FEMA information to show that Continental Ranch is not behind a levee. They are looking at corrective measures to pull area out of the flood plain. They have discussed with different developers and their engineers producing a new hydrological model of the Tortolita Fan possibly to show increased attenuation on the Tortolia Fan which would reduce the amount of flows possibly below a level where FEMA is no longer concerned. If that is not possible any further design or major project we do is still going to need a hydrological model that is up to date. We will likely need some up stream protection of the CAP canal to create a new levee or an impoundment basin to catch the water and then release it in a controlled manner and gain a letter of map revision that way. Either of those changes will require a large scale project, significant amount of funding and coordination with stakeholders. Also, it would need the coordination of state land as they are what is up stream of the CAP Bureau of Land Reclamation right of way. We will also likely need a well-defined channelization system to convey water throughout northwest Marana. Marana Road, Hardin Road and then the Range Line are likely candidates. We would need to do a full scale drainage study of the entire northwest. Council Member McGorray stated with some of the federal entities involved if they were all going to have to go through the town and referred to the CAP canal. Mr. Brann stated the CAP canal was constructed as a project by the BOR. It is not a structure. They are not concerned with their facility providing flood mitigation. He stated the BOR is not willing to take on the liability of providing flood protection. Mr. Reuwsaat stated it would be appropriate at next Council meeting to bring a resolution requesting reconsideration or help from the federal side in 7 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: August 14,2007 addressing this issue. San Lucas, Amole Circle, and Adonis residents are facing significant increase in their flood insurance. He stated staff has registered their concerns on this issue. Council Member Ziegler stated she could like to see numbers on what this would cost. Council Member Clanagan asked if the developers had been informed and of the financial impact of this. Mr. Brann stated he notified the master developer and the homebuilders within San Lucas after we received the PAL letter. Vice Mayor Kai asked to get some consultants to get the letter of map revision done. Mr. Reuwsaat stated we are working with one hydrologist who is doing most of the mapping and trying to work on an overall solution. Council Member Escobedo asked about other developers such as Saguaro Springs. He mentioned Berry Acres map revision. Mr. Brann stated the approach FEMA is taking to the removal of the levee features is not a detailed analysis. They are looking for features and they are bringing the flood plain behind it. They are not looking to change flood ways or redefine how rivers flow. There is a chance that the undefined zone A flood plain cari keep extending west. We could see a lower Santa Cruz levee with a flood plain on both sides. Michael Racy addressed Council about rapidly getting in touch with the congressional delegation and talk about the timing of some of this. He stated they heard as part of the Villages of Tortolita project which is between the CAP and the interstate just north of San Lucas that it was going to affect them. They have been doing some analysis of the existing CAP. They have been working with the Bureau of Reclamation. They have been receptive to doing things that are helpful, but not a big dollar levels. The BOR owns a very wide strip of land along the northeast side of the CAP. There may be an opportunity to create some detention/retention areas there and that or in combination with some armoring could have profound benefits for the whole area. He stated he has had discussions with a number of builders that are affected. They are working on trying to get a meeting with the private stakeholders to work with the town and try to come up with some regional solutions, moving quickly, but it makes sense to initiate a political effort to get a little more time. Mr. Racy stated this is part of an enormous national effort in response to levees that failed where they shouldn't have failed and now the federal system is re- examining all of these. 8 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: August 14,2007 Phyllis Ferenga, 11470 W. Tortolita Street, addressed Council and read a letter from Martha Irene Soria, Marana Estates, who could not attend. She asked if FEMA could be trusted to do the right thing for the people. She stated an area that concerns the Marana Estates homeowners is the comer of Adonis and Amole. This area started to fill up with rain water a couple years ago. She stated is seems to be a road misalignment which could be solved by town engineers and not FEMA. F. MAYOR AND COUNCIL REPORTS: SUMMARY OF CURRENT EVENTS Council Member Clanagan stated he has received a few calls regarding the use of Marana prison im-nates to clean and maintain the roadway adjacent to the new Rattlesnake Ridge School. He stated he has been in contact with the warden. He stated perhaps the issue of how the inmates are being used needs to be addressed. Council Member McGorray stated they will be attending the Governors Conference which will take place at the El Conquistador, Wednesday, Thursday and Friday. Council Member Escobedo stated on Saturday there was a ribbon cutting at Continental Ranch for a facility offering children and adult education. Council Members Clanagan and Comerford were also in attendance. He was a representative in Mexico City with 35 other elected officials across the county in reference to Mexicans living abroad and immigration issues. He stated Mr. Stolmaker of the Chamber of Commerce was unable to attend the meeting, but wished everyone to know there would be a luncheon from 11:45 to 1:00 at the Oasis at Wildhorse Ranch. He stated about 52 different organizations of the chamber will be recognized. Mr. Honea stated he and T. VanHook represented the town on the TREO trip to Portland. He stated Vice Mayor Kai is going to be having heart valve surgery and asked that he and his family be in our prayers. Vice Mayor Kai stated his cardiologist told him he needs to have an aorta valve replacement within the next two weeks. He thanked everyone for their prayers. G. MANAGER'S REPORT: SUMMARY OF CURRENT EVENTS H. STAFF REPORTS GENERAL ORDER OF BUSINESS 1. CONSENT AGENDA 9 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: August 14, 2007 J. COUNCIL ACTION 1. Resolution No. 2007-139: Relating to the Marana Regional Airport; accepting Grant Agreement E8SO9 for $540,000 between the ADOT-Aeronautics Division and the Town of Marana for a Fire Protection Water Line (Charles Mangum) Mr. Mangum addressed Council and stated that this will be a grant agreement for $540,000 with a ten percent local match of $60,000 that was budgeted and approved in the CIP program. The fire protection water line will loop our current system at the airport. 2. Resolution No. 2007-140: Relating to the Marana Regional Airport; accepting Grant Agreement E8S10 for $760,387 between the ADOT- Aeronautics Division and the Town of Marana for the design and construction of a bypass apron on Taxiway A (Charles Mangum) Mr. Mangum stated the ten percent local match is $84,487 which was approved with the CIP project. The total amount of the project is $844,874. The bypass apron will be constructed right off taxiway Alpha aiid the intersection of taxiway Charlie. This bypass apron will alleviate head on situations. 3. Resolution No. 2007-141: Relating to the Marana Regiona Airport; accepting Grant Agreement E8Sll for $220,000 between the ADOT- Aeronautics Division and the Town of Marana for the design and construction of a new security fence (Charles Mangum) Mr. Mangum stated the local match is $24,444 for a total project amount of $244,444. This is the land we're currently buying, 90 acres that we're looking to acquire from the state land department. The roadway is out to bid. They are working on the terminal and restaurant facility. It would be installing a fence on the east and west side of the proposed property that we are buying. 4. Resolution No. 2007-142: Relating to the Marana Regional Airport; accepting Grant Agreement E8SI2 for $429,613 between the ADOT- Aeronautics Division and the Town of Marana for the reconstruction and expansion of the south apron (Charles Mangum) Mr. Mangum stated with the ten percent local match the total project would be $477,348. The apron serves the helicopter area and is used for fire protection and large cargo aircraft. The existing apron will be expanded south. There will be a proposed site for Northwest Fire to have a facility at the airport. It will be a joint use facility. The plans are to start that process in 2010. The temporary air base started in April and stays at the airport all summer long to protect our areas. 10 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: August 14, 2007 Council Member Ziegler asked about the status of the auction. th Mr. Mangum stated it was supposed to be August 9 . There were some errors by the State Land Department. He stated it should be advertised in September and October. He and Mr. Reuswaat have a meeting with the State Land Department next Tuesday. It has to advertise for ten weeks. Upon motion by Council Member McGorray, seconded by Council Member Clanagan, Resolutions No. 2007-139, 140, 141 and 142 were unanimously approved. K. BOARDS, COMMISSIONS AND COMMITTEES L. ITEMS FOR DISCUSSION/POSSIBLE ACTION M. EXECUTIVE SESSIONS Executive Session pursuant to A.R.S. §38-431.03 (A)(3), Council may ask for discussion or consultation for legal advice with the Town Attorney concerning any matter listed on this agenda. Executive Session pursuant to A.R.S. §38-431.03(A)(3),(4),(6) and (7) for legal advice with the Town Attorney concerning water rights issues and to consult with and instruct the Town Attorney and the Town Manager concerning the 1979 intergovernmental agreement between the Town of Marana and Pima County relating to sewer service within the Marana town limits and to direct the Town Manager and Town Attorney with respect to that agreement (Frank Cassidy) Upon motion by Council Member Clanagan, seconded by Council Member Escobedo, Council voted to convene to Executive Session. Mr. Cassidy stated staff would request that the town manager and town attorney be directed to proceed as was discussed in Executive Session with respect to the discussion and implementation of the 1979 Pima County/Marana IGA. Upon motion by Council Member McGorray, seconded by Council Member Clanagan, item as discussed in Executive Session was unanimously approved. N. FUTURE AGENDA ITEMS 11 MINUTES OF REGULAR COUNCIL MEETING MARANA MUNICIPAL COMPLEX DATE: August 14, 2007 0. ADJOURNMENT Upon motion by Council Member Escobedo, seconded by Council Member Clanagan, Council voted to adjourn. CERTIFICATION I hereby certify that the foregoing are the true and correct minutes of the Marana Town Council meeting held on August 14, 2007. 1 further certify that a quorum was present. Jocelyn C. Bronson, Town Clerk 12 N 0 TOWN COUNCIL 7 MEETING TOWN OF MARANA MXkA;A INFORMATION MEETING DATE: September 4, 2007 AGENDAITEM: J. 1. a. TO: MAYOR AND COUNCIL FROM: Jane Fairall, Deputy Town Attorney SUBJECT: Ordinance No. 2007.21: Relating to Municipal Court; revising court fees; amending Marana Town Code Section 5-6-1 entitled "Fee Schedule for Court Costs"; and declaring an emergency. DISCUSSION This item proposes to amend the municipal court fees ordinance to increase two court fees by $15 each. The proposed amendment is based on consultation with Marana Municipal Court Judge Jim West and Court Administrator Joe Teta. On July 27, 2007, the Administrative Office of the Courts (AOC) notified the Marana Municipal Court that any local ordinance fees that are routinely assessed against all defendants found re- sponsible or guilty for a violation are subject to state imposed surcharges (a copy of the memo- randum is attached). Currently state surcharges add up to 80%; however, the surcharges will in- crease to 84% effective September 19, 2007. The increase to the two Marana Municipal Court fees is proposed to offset a portion of the lost revenue the town will experience due to the fact that 84% of those fees will now be remitted to the state pursuant to the state surcharges. This ordinance is proposed to be adopted with an emergency clause so that the revised fees can go into effect with the printing of the new "Traffic Violations Information Envelope" that defen- dants receive when they are cited. RECOMMENDATION Staff recommends adoption of Ordinance No. 2007.21, revising the Marana Municipal Court fees. SUGGESTED MOTION I move to adopt Ordinance No. 2007.2 1. 100005883.DOCII JF 811710 7 MARANA ORDINANCE NO. 2007.21 RELATING TO MUNICIPAL COURT; REVISING COURT FEES; AMENDING MARANA TOWN CODE SECTION 5-6-1 ENTITLED "FEE SCHEDULE FOR COURT COSTS"; AND DECLARING AN EMERGENCY. WHEREAS the Town Council finds that revision of fees payable in the Marana Munici- pal Court is in the best interests of the Town and its residents. NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, as follows: SECTION 1. Title 5 of the Marana Town Code is hereby revised by amending sec- tion 5-6-1 entitled "Fee schedule for court costs" as follows (with deletions shown with stfike otAs and additions shown with double underlining): Chapter 5-6 FEES Section 5-6-1 Fee schedule for court costs A. The following fees are established to recover costs associated with the fees charged to the town treasury for returned checks and additional costs incurred due to court non-appearance. 1. The fee for the taking of a default judgment shall be $65. 2. The fee for all returned checks shall be $20 per item. B. The following municipal court fees are established, to be imposed in addition to fees otherwise assessable by statute. 1. Any person who has been convicted of a misdemeanor criminal offense in the Marana town Court and sentenced to a term of incarceration in any de- tention facility authorized by law shall be required to pay a jail reimburse- ment fee in the amount actually paid by the town for that incarceration. 2. Upon a defendant's conviction at trial or conviction by plea agreement the Marana town Court shall impose a $2640 per citation prosecution fee against each defendant, unless a higher or lower amount is imposed by a written plea agreement based upon the actual cost of prosecution services and the indigent status of the defendant. 3. An administrative warrant fee in the amount of $20 shall be imposed to cover the Marana town court's costs for processing warrants when a Ma- rana town court magistrate issues a warrant for failure to comply with a court order, failure to pay a fine, failure to pay restitution or failure to ap- pear. (00005698.DOC / 3) 8/17/2007 4:16 PM JF 4. The Marana town court shall impose a court improvement fee in the amount of $2035 per citation which shall be applied by the court on all fines, sanctions, penalties and assessments imposed by the court. 5. A jury cancellation fee shall be imposed on a party who requests a jury trial and then decides, within five days before the trial and after the court has arranged for a jury to be impaneled, not to proceed with the jury trial. The jury cancellation fee shall equal the actual costs incurred to cancel the jury (typically $100 to $400). 6. Each defendant allowed to complete community service in lieu of paying any fine, fee or surcharge shall be charged a fee of $5 to cover part of the cost of monitoring his or her progress on completing the community ser- vice. 7. A $40 fee for service of process on an order of harassment, subject to the limitations set forth in A.R.S. § 12-1809(D). 8. In addition to any other remedy allowed by law, the town attorney is author- ized to institute any appropriate action for recovery of any and all monies owed or due to the Marana town court including, but not limited to, restitu- tion, fees, sanctions, surcharges, assessments, penalties, bonds, costs, and fees. A defendant who defaults in his or her obligation for the payment of monies owed or due to the court is liable for all costs of collection includ- ing attorney fees and costs, and fees and charges assessed by a collec- tion agency licensed pursuant to title 32, chapter 9, Arizona Revised Stat- utes, that is engaged to collect and enforce that obligation. C. The magistrate shall retain the power to waive all or any part of fee assess- ments if any of the following conditions apply: 1. The defendant is found by the Marana town court to be indigent; 2. The fee imposed upon a defendant causes a hardship on the defendant or the defendant's immediate family; or 3. In the opinion of the magistrate the waiver would be in the interest of jus- tice. D. There is hereby established a court improvement fund which shall be used exclusively to enhance the technological, operational and security capabilities of the Marana town court. The court improvement fund shall be established as a designated fund account with the town treasurer. The court shall collect the court improvement fees as defined in this section and deposit them in the court improvement fund account. Half of the court improvement fund shall be available for use as determined by the court for training, additional contract work, temporary court help, and other similar purposes, as documented in a manner requested by the town manager. The town treasurer shall invest the monies in the fund in the same manner as town funds. Interest earned on fund monies shall be deposited in the fund. SECTION 2. IT IS FURTHER ORDAINED that, since it is necessary for the preservation of the peace, health and safety of the Town of Marana that this ordinance become immediately effective, an emergency is hereby declared to exist, and this ordinance shall be effective immedi- ately upon its passage and adoption. SECTION 3. Anything in Section 2 of this Ordinance notwithstanding, fees revised by this ordinance that are printed in the "Traffic Violations Information Envelope" provided to de- [00005698.DOC / 2) -2- 8/17/2007 4:16 PM JF fendants upon receipt of a citation are effective for citations accompanied by the reprinted "Traf- fic Violations Information Envelope" containing the revised fees. PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, this 4 1h day of September, 2007. Mayor Ed Honea ATTEST: Jocelyn C. Bronson, Town Clerk APPROVED AS TO FORM: Frank Cassidy, Town Attorney {00005698.DOC / 21 -3 - 8/17/2007 4:16 PM JF TO: All Presiding Judges All Clerks of Superior Court All Juvenile Court Directors All Chief Adult Probation Officers All Court Administrators All Chief Clerks From: Janet Scheiderer, Court Services Division Director Date: July 27, 2007 Subject: Statewide Surcharge Application to Local Fees This is to advise you of a recent Attorney General opinion letter that concluded the state surcharges apply to local administrative fees and forfeitures. In addressing municipal fees established under A.R.S. § 22-404 (E), the opinion letter relied upon Attorney General Opinion 100-015 concerning parking violation fees as follows: "Nothing in the language of A.R.S. §§ 12-116.01 and -116.02 or A.R.S. §22-404 exclude fees established by a municipality under authority of A.R.S. § 22-404(E) from the surcharges imposed by A.R.S. §§ 12-116.01 and -116.02. Additionally, after considering the language and purpose of the surcharge statutes, this Office's previous conclusion that certain fees, depending on their character, can be subject to the surcharges imposed by A.R.S. §§ 12-116.01 and -116.02, indicates that A.R.S. § 22-404(E) does not in and of itself shield fees established thereunder from the surcharge statutes. (Attached is a full copy of the response.) The opinion letter was requested by the Administrative Office of the Courts in response to a letter earlier this year by a town attorney regarding applicability of the surcharge to A.R.S.S. § 22-404 (E). This statute states "A city or town may establish and assess fees for court programs". AOC has consistently advised the courts that when a fee applies broadly such as to all civil or criminal traffic offenses and is equally applied to every finding of responsibility or guilt the state surcharge also applies. The Attorney General's 10000588 LDOC /) Opinion No. 100-015 included similar language and the opinion letter re-states the same position. "As this Office previously opined, the surcharges are applicable to fees that are routinely assessed against all persons for violations of the laws set forth in the surcharge statutes, but not for fees that are related to a specific service that are imposed against a specific violator (i.e., late payment fee or returned check fee). See Ariz. Op. Afty. Gen. No. 100-015." The surcharges also apply to superior courts and justice courts which assess fees adopted pursuant to A.R.S. §11-251.08 for the same reasons they apply to fees assessed pursuant to A.R.S. § 22-404 (E). Please note that in the past, the State of Arizona filed suit against three municipalities to recover uncollected penalty assessments required to be levied by statute. The lawsuit was settled with significant payments by the three cities. Courts that routinely assess a local fee against all persons for a violation must assess the surcharge either by adding the surcharge to the amount of the fee or by splitting the current assessment proportionately to consist of a reduced fee amount and the 80%* total surcharges as currently provided in statute. A change in the local ordinance may be required. Courts should not do this for fees that are assessed based upon individual circumstances such as the returned check fee, warrant fee or default fee. If the court determines that a local fee should not be subject to the surcharge, either because it does not appear to fit the criteria for application of the surcharges or if you have any other questions, please contact Patrick Scott at (602) 452- 3255 or e-mail him at: PScott(c-b-courts.az.go . *The surcharges increase to 84% effective September 19, 2007 is the result of Chapter 261 (HB2787) which increases the surcharge for the Arizona deoxyribonucleic acid identification system fund from 3% to 7%. Janet Scheiderer Court Services Division Director 1501 W. Washington, Suite 411 Phoenix, AZ 85007 Phone: 602.452.3334 Fax: 602.452.3659 ischeid(d)courts.az.c /o (0000588 LDOC /) N 0'r TOWN COUNCIL TOWN OF MARANA MEETING MARANA 7 4 ovk?, INFORMATION (40 RIZO MEETINGDATE: September4,2007 AGENDAITEM: J. 1. b TO: MAYOR AND COUNCIL FROM: Jane Fairall, Deputy Town Attorney SUBJECT: Resolution No. 2007-151: Relating to Municipal Court; declaring the revisions to Town Code Title 5 adopted by Marana Ordinance No. 2007.21 as a public record filed with the Town Clerk; and de- claring an emergency. DISCUSSION This resolution makes the amendments to Title 5 of the Marana Town Code a public record. This process makes it possible for the revisions to be adopted by reference under A.R.S. § 9-802, thereby avoiding the requirement to publish the entire document, as would otherwise be required under A.R.S. § 9-812. RECOMMENDATION Staff recommends adoption of Resolution No. 2007-151, immediately prior to or at the same time as the adoption of Ordinance No. 2007.21, the adopting ordinance for the revisions to Title 5 of the Marana Town Code. SUGGESTED MOTION I move to adopt Resolution No. 2007-15 1, and declare an emergency. 100005890.DOCI? JHF 811712 00 7 MARANA RESOLUTION NO. 2007-151 RELATING TO MUNICIPAL COURT; DECLARING THE REVISIONS TO TOWN CODE TITLE 5 ADOPTED BY MARANA ORDINANCE NO. 2007.21 AS A PUBLIC RECORD FILED WITH THE TOWN CLERK; AND DECLARING AN EMERGENCY. BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, as follows: SECTION 1. The revisions to Town Code Title 5 (Municipal Court) adopted by Marana Ordinance No. 2007.21, a copy of which is attached to and incorporated in this resolution as Exhibit A and three copies of which are on file in the office of the Town Clerk, is hereby declared to be a public record and ordered to remain on file with the Town Clerk. SECTION 2. Since it is necessary for the preservation of the peace, health and safety of the Town of Marana that this resolution become immediately effective, an emergency is hereby declared to exist, and this resolution shall be effective immediately upon its passage and adoption. PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, this 4 1h day of September, 2007. Mayor Ed Honea ATTEST: Jocelyn C. Bronson, Town Clerk APPROVED AS TO FORM: Frank Cassidy, Town Attorney {00005888.DOC /I JHF 8117/0 7 MARANA ORDINANCE NO. 2007.21 RELATING TO MUNICIPAL COURT; REVISING COURT FEES; AMENDING MARANA TOWN CODE SECTION 5-6-1 ENTITLED "FEE SCHEDULE FOR COURT COSTS"; AND DECLARING AN EMERGENCY. WHEREAS the Town Council finds that revision of fees payable in the Marana Munici- pal Court is in the best interests of the Town and its residents. NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, as follows: SECTION 1. Title 5 of the Marana Town Code is hereby revised by amending sec- tion 5-6-1 entitled "Fee schedule for court costs" as follows (with deletions shown with strike etAs and additions shown with double underlining): Chapter 5-6 FEES Section 5-6-1 Fee schedule for court costs A. The following fees are established to recover costs associated with the fees charged to the town treasury for returned checks and additional costs incurred due to court non-appearance. 1. The fee for the taking of a default judgment shall be $65. 2. The fee for all returned checks shall be $20 per item. B. The following municipal court fees are established, to be imposed in addition to fees otherwise assessable by statute. 1. Any person who has been convicted of a misdemeanor criminal offense in the Marana town Court and sentenced to a term of incarceration in any de- tention facility authorized by law shall be required to pay a jail reimburse- ment fee in the amount actually paid by the town for that incarceration. 2. Upon a defendant's conviction at trial or conviction by plea agreement the Marana town Court shall impose a $2-540 per citation prosecution fee against each defendant, unless a higher or lower amount is imposed by a written plea agreement based upon the actual cost of prosecution services and the indigent status of the defendant. 3. An administrative warrant fee in the amount of $20 shall be imposed to cover the Marana town court's costs for processing warrants when a Ma- rana town court magistrate issues a warrant for failure to comply with a court order, failure to pay a fine, failure to pay restitution or failure to ap- pear. {00005698. DOC / 3) 8/17/2007 4:16 PM JF 4. The Marana town court shall impose a court improvement fee in the amount of $20a5 per citation which shall be applied by the court on all fines, sanctions, penalties and assessments imposed by the court. 5. A jury cancellation fee shall be imposed on a party who requests a jury trial and then decides, within five days before the trial and after the court has arranged for a jury to be impaneled, not to proceed with the jury trial. The jury cancellation fee shall equal the actual costs incurred to cancel the jury (typically $100 to $400). 6. Each defendant allowed to complete community service in lieu of paying any fine, fee or surcharge shall be charged a fee of $5 to cover part of the cost of monitoring his or her progress on completing the community ser- vice. 7. A $40 fee for service of process on an order of harassment, subject to the limitations set forth in A.R.S. § 12-1809(D). 8. In addition to any other remedy allowed by law, the town attorney is author- ized to institute any appropriate action for recovery of any and all monies owed or due to the Marana town court including, but not limited to, restitu- tion, fees, sanctions, surcharges, assessments, penalties, bonds, costs, and fees. A defendant who defaults in his or her obligation for the payment of monies owed or due to the court is liable for all costs of collection includ- ing attorney fees and costs, and fees and charges assessed by a collec- tion agency licensed pursuant to title 32, chapter 9, Arizona Revised Stat- utes, that is engaged to collect and enforce that obligation. C. The magistrate shall retain the power to waive all or any part of fee assess- ments if any of the following conditions apply: 1. The defendant is found by the Marana town court to be indigent; 2. The fee imposed upon a defendant causes a hardship on the defendant or the defendant's immediate family; or 3. In the opinion of the magistrate the waiver would be in the interest of jus- tice. D. There is hereby established a court improvement fund which shall be used exclusively to enhance the technological, operational and security capabilities of the Marana town court. The court improvement fund shall be established as a designated fund account with the town treasurer. The court shall collect the court improvement fees as defined in this section and deposit them in the court improvement fund account. Half of the court improvement fund shall be available for use as determined by the court for training, additional contract work, temporary court help, and other similar purposes, as documented in a manner requested by the town manager. The town treasurer shall invest the monies in the fund in the same manner as town funds. Interest earned on fund monies shall be deposited in the fund. SECTION 2. IT IS FURTHER ORDAINED that, since it is necessary for the preservation of the peace, health and safety of the Town of Marana. that this ordinance become immediately effective, an emergency is hereby declared to exist, and this ordinance shall be effective immedi- ately upon its passage and adoption. SECTION 3. Anything in Section 2 of this Ordinance notwithstanding, fees revised by this ordinance that are printed in the "Traffic Violations Information Envelope" provided to de- {00005698.DOC / 2) -2- 8/17/2007 4:16 PM JF fendants upon receipt of a citation are effective for citations accompanied by the reprinted "Traf- fic Violations Information Envelope" containing the revised fees. PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, this 4 th day of September, 2007. Mayor Ed Honea ATTEST: Jocelyn C. Bronson, Town Clerk APPROVED AS TO FORM: Frank Cassidy, Town Attorney (00005698.DOC / 2) -3- 8/17/2007 4:16 PM JF TOWN COUNCIL MEETING TOWN OF MARANA INFORMATION MEETINGDATE: September4,2007 AGENDA ITEM: K. I TO: MAYOR AND COUNCIL FROM: Frank Cassidy, Town Attorney SUBJECT: Resolution No. 2007-152: ordering and declaring formation of the Saguaro Springs Community Facilities District; approving and authorizing the execution and delivery of a District Development, Financing Participation and Intergovernmental Agreement (Saguaro Springs Community Facilities District) and declaring an emergency. DISCUSSION This resolution authorizes the execution of a District Development, Financing Participation and Intergovernmental Agreement (Saguaro Springs Community Facilities District) (the "CFD Agreement") concerning matters related to the creation of the Saguaro Springs CFD. It also takes all steps necessary to order and declare formation of the Saguaro Springs CFD. The Mayor and Council of the Town of Marana will serve as the Board of Directors of the Saguaro Springs CFD (the "CFD Board"), the Town Manager will serve as the CFD Manager, the Town Engineer will act as the CFD Engineer, the Town Attorney will act as the CFD Attorney, and other Town officials will act in their same capacity for the CFD. One or more of the CFD positions may eventually be contracted to outside personnel; for example, it is likely that an outside engineering firm will be substituted as CFD Engineer, to accept and inspect public infrastructure acquired or constructed by the CFD. By a resolution of its own, the CFD Board will schedule an election on October 30, 2007 to authorize the sale of a total of $99,000,000 in bonds over the life of this CFD. The CFD Agreement allows control by the Developer until the first $33,000,000 in bonds are issued or 20 years, whichever occurs first. It is anticipated that this first $33,000,000 in bonds, if the CFD Board decides to sell them, will be used to reimburse the Developer for public infrastructure constructed by it, in and for the benefit of Saguaro Springs, including certain infrastructure addressed in Exhibit B to the CFD Agreement, which must be provided by the Developer. The remaining bond authorization will be available to fund later public infrastructure projects to the extent they benefit Saguaro Springs. These documents anticipate a maximum secondary tax rate of $2.80 per $100 of assessed valuation, which includes $3 0 per $ 100 for operation and maintenance expenses. The actual rate could go higher, if for some reason the total assessed valuation within the CFD falls or some other unforeseen event makes it necessary to raise the tax rate to cover the bond obligations. The Developer's financial obligations under these documents or as a result of forming this CFD include (a) non-refundable application fee of $75,000, (b) an annual obligation to pay up to t0000066LDOCI] Saguaro Springs CFD 812912007110:24.-38 AMljcblFJC $100,000 in CFD operation and maintenance costs, to the extent such costs are not covered by the $30 per $100 operation and maintenance tax, (c) deposit $25,000 with the Town to cover initial costs of the CFD prior to the levy of the $30 per $100 operation and maintenance tax, (d) the obligation to provide standby contributions to cover any difference in the amount necessary to pay annual financial obligations with respect to all outstanding bonds and the amount generated by a tax rate of no more than $2.50 per $ 100 of assessed valuation, and (e) the obligation, at the CFD Board's discretion, to deposit twice the maximum annual debt service for any fiscal year (in addition to the reserve fund in the amount of up to one year's debt service paid out of bond proceeds, at the discretion of the CFD Board). RECOMMENDATION Staff recommends adoption of Resolution No. 2007-152. SUGGESTED MOTION I move to adopt Resolution No. 2007-152. (0000066].DOCI) Saguaro Springs CFD -2- RESOLUTION NO. 2007-152 ORDERING AND DECLARING FORMATION OF SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT; APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY OF A DISTRICT DEVELOPMENT, FINANCING PARTICIPATION AND INTERGOVERNMENTAL AGREEMENT (SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT) AND DECLARING AN EMERGENCY BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE TOWN OF MARANA, ARIZONA, as follows: 1. findings. a. On a date prior to the date of the adoption here- of, there was presented to us, the governing body of the Town of Marana, Arizona, an incorporated municipality of the State of Arizona (hereinafter called the "Municipality"), a Petition for Adoption of a PHX 327532448v2 811312007 Resolution Declaring Formation of Saguaro Springs Community Facilities District, dated as of even date herewith (hereinafter referred to as the "Petition"), signed by the entities which, on the date hereof, are the owners of all real property as shown on the assessment roll for State and county taxes for Pima County, Arizona, or, if such persons shown on such assessment roil are no longer the owners of land in Saguaro Springs Community Facilities District are the entities which are the successor owners which have become known and have been veri- fied by recorded deed or similar evidence of transfer of ownership to be the owners of such real property (including the hereinafter defined "KB Home Tucson" and "Empire Land" and hereinafter referred to as, collectively, the "Petitioner") described in the Petition by metes and bounds to be in the community facilities district, the formation of which is prayed for by the Petitioner in the Petition, pursuant to Title 48, Chapter 4, Article 6, Arizona Revised Statutes, as amended (hereinafter referred to as the "Act"). b. The Petitioner has requested the following: I. The name of the community facilities dis- trict of which formation is prayed pursuant to the Petition to be "Saguaro Springs Community Facilities District" (hereinafter called the "District"), 2 PHX 327532448v2 811312007 I I . The District to be formed and exist pursu- ant to the terms and provisions of the Act as such terms and provisions are modified, waived or restricted pursuant to agreements to be entered into by and among the Petitioner, the Municipal- ity and the District, III. The District to contain an area of approxi- mately 787.38 acres of land, more or less, wholly within the corporate boundaries of the Municipal- ity and to be composed of the land included in the parcels described as provided in Exhibit "A" to the Petition, which is made a part of the Petition for all purposes and is all the land to be included within the boundaries of the District (hereinafter referred to as the "Property"), IV. The District to be a special purpose dis- trict for purposes of Article IX, Section 19, Constitution of Arizona, a tax levying public improvement district for the purposes of Article XIII, Section 7, Constitution of Arizona, and a municipal corporation for all purposes of Title 35, Chapter 3, Articles 3, 3.1, 3.2, 4 and 5, 3 PHX 327532448v2 8/13/2007 Arizona Revised Statutes, as amended; except as otherwise provided in the Act, to be considered a municipal corporation and political subdivision of the State of Arizona separate and apart from the Municipality; and to be formed for, and to have, all the purposes of a "district" as such term is defined, and as provided, in the Act, V. The formation of the District to result in the levy of ad valorem taxes to pay costs of improvements constructed by the District and for their operation and maintenance, Vi. The Clerk of the Municipality to accept the filing of a "General Plan for Community Facili- ties District" for the District setting out a general description of the improvements for which the District is proposed to be formed and the general areas to be improved (hereinafter referred to as the "General Plan"), and VII. The Municipality to determine that public convenience and necessity require the adoption of this Resolution. 4 PHX 327532448v2 811312007 C. The Petitioner further attested and declared that on the date hereof, as shown on the assessment roll for State and county taxes in Pima County, Arizona, the Property is owned by the Petitioner and shall be benefited from the improvements for which the District is proposed to be formed; that there are no residents on the Property and there shall be no residents within fifty (50) days preceding the first anticipated election of the District; that the District shall be formed and exist pursuant to the terms and provi- sions of the Act as such terms and provisions are modified, waived or restricted pursuant to agreements to be entered into by and among the Petitioner, the Municipality and the District; that public convenience and necessity require the adoption of this Resolution; and that the Municipality shall in no way be liable for the payment of any of the costs of the public infrastructure described in the General Plan, except to the extent the Municipality otherwise agrees to be liable, nor liable for any liability, debt or obligation of the District. d. After showing the preceding, the Petitioner respectfully prayed that the Petition be properly filed as provided by law and that, as the Petition is signed by all of the owners of the Property and there are not now, and shall not be within fifty (50) days preceding the first anticipated election of the District, resi- dents on the Property, any requirements of posting, publication, mail- ing, notice, hearing and election otherwise required by the Act in connection with the adoption of this Resolution are waived, the Municipality, on receipt of the Petition, declare the District formed PHX 327532448V2 811312007 5 without being required to comply with such provisions for posting, publication, mailing, notice, hearing or election. e. Pursuant to the Act and Section 9-500.05, Arizona Revised Statutes, as amended, the Municipality, the District, Saguaro Reserve, LLC (hereinafter called "Saguaro Reserve"), KB Home Tucson, Tnc. (hereinafter called "KB Home Tucson") and Empire Land Venture I, LLC (hereinafter called "Empire Land") are entering into a "development agreement" to specify, among other things, conditions, terms, restrictions and requirements for "public infrastructure" (as such term is defined in the Act) and the financing of public infra- structure and subsequent reimbursements or repayments over time. f. With regard to the real property included within the boundaries of the District, the Municipality and Saguaro Reserve determined to specify some of such matters in such an agreement, particularly matters relating to the acquisition or construction of certain public infrastructure by the District, the acceptance thereof by the Municipality and the reimbursement or repayment of Saguaro Springs with respect thereto, all pursuant to the Act. 9. Pursuant to the Act and Title 11, Chapter 7, Article 3, Arizona Revised Statutes, as amended, the District, and the Municipality may enter into an "intergovernmental agreement" with one another for joint or cooperative action for services and to jointly exercise any powers common to them and for the purposes of the plan- ning, design, inspection, ownership, control, maintenance, operation or repair of public infrastructure. 6 PHX 327532448v2 811312007 h Pursuant to the Act, the District may also enter into an agreement with Saguaro Reserve, KB Home Tucson and Empire Land with respect to the advance of moneys for public infrastructure purposes and the repayment of such advances and to obtain credit enhancement for, and process disbursement and investment of proceeds of, general obligation bonds of the District to be hereafter issued. i. There has been presented to us in connection with the purposes described in paragraphs l.e. through h. a District Devel- opment, Financing Participation and Intergovernmental Agreement (Saguaro Springs Community Facilities District), to be dated as of September 1, 2007 or such other date as the District Manager shall determine (hereinafter referred to as the "Development Agreement") . by and among the Municipality, the District, Saguaro Reserve., KB Home Tucson and Empire Land. 2. Matters Noticed by the Municij2ality. a. The Petitioner seeks formation of the District to exercise the powers and functions set forth in the Act as such powers and functions are modified, waived or restricted pursuant to agree- ments to be entered into by and among the Petitioner, the Municipality and the District. b. The General Plan has been filed with the Clerk of the Municipality. C. The Petition and all necessary supporting mate- rials have been filed with us, and the showings in the Petition are each noticed by us and are hereby incorporated at this place as if set forth hereat in whole. 7 PHX 327532448v2 811312007 d . The purposes for which organization of the Dis- trict is sought are as described in the Petition and are purposes for which a district created pursuant to the Act may be lawfully formed. e. The public convenience and necessity require us to adopt this Resolution. 3. Granting of Petition; Formation of District. The Petition attached hereto as Exhibit "A" and made a part hereof for all purposes is hereby granted, and the District is hereby formed as a district pursuant to the terms and provisions of, and with the powers and authority established by, the Act, subject to the restrictions and modifications set forth in the Petition, with jurisdiction over the Property and that, as the Petition is signed by the owner of the Prop- erty and there are not now, and shall not be within fifty (50) days preceding the first anticipated election of the District, residents on the Property, requirements of posting, publication, mailing, notices, hearing and election otherwise required by the Act with respect to formation of the District are hereby found to be unnecessary. 4. District Board and officers. The District shall be governed by a "District Board" comprised of the members of the govern- ing body of the Municipality, ex officio. The Mayor of the Municipal- ity shall be the "Chairperson of the District Board"; the Vice Mayor of the Municipality shall be the "Vice Chairperson of the District Board"; the Town Clerk of the Municipality shall be the "District Clerk"; the Town Treasurer of the Municipality shall be the "District Treasurer"; the Town Manager of the Municipality shall be the "Dis- trict Manager"; the Finance Director of the Municipality shall be the 8 PHX 327532448v2 811312007 "District Chief Financial Officer" and the Town Attorney of the Munic- ipality shall be the "District Counsel." 5. District Boundaries and Map. The District boundaries are as described in metes and bounds in Exhibit "A" to the Petition. A map showing the District boundaries is hereby ordered to be drawn and provided by the District Manager. 6. Dissemination of this Resolution. The Petitioner shall cause a copy of this Resolution to be delivered to the County Assessor and the Board of Supervisors of Pima County, Arizona, and to the Department of Revenue of the State of Arizona. 7. Authorization and Approval of Development Agreement. The Development Agreement is hereby approved in substantially the form submitted herewith, with such changes, additions, deletions, inser- tion s and omissions, if any, as the Mayor of the Municipality, with the advice of the Town Manager of the Municipality and the Town Attor- ney of the Municipality, shall authorize, the execution and delivery of the Development Agreement to be conclusive evidence of the propri- ety of such document and the authority of the persons or persons executing the same. The Mayor of the Municipality, with the advice of .the Town Manager of the Municipality and the Town Attorney of the Municipality, is hereby authorized and directed to execute, and the Town Clerk of the Municipality to attest and deliver, the Development Agreement on behalf of the Municipality. 8. No Liability of or for the Municipality. Neither the Municipality nor the State of Arizona or any political subdivision of either (other than the District) shall be directly, indirectly or 9 PHX 327532448v2 811312007 morally liable or obligated for the costs of the public infrastructure contemplated by the General Plan and the Development Agreement nor for the payment or repayment of any indebtedness, liability, cost, expense or obligation of the District, and neither the credit nor the taxing power of the Municipality, the State of Arizona or any political sub- division of either (other than the District) shall be pledged there- f or. 9. Effect of Resolution. a. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any remaining provisions of this Resolution. b. All resolutions or parts thereof inconsistent herewith are hereby waived to the extent only of such inconsistency. 10. Emergency Clause. The immediate operation of the pro- visions of this Resolution is necessary to the orderly development of property within the Municipality and the resulting preservation of the public peace, health and safety, an EMERGENCY is hereby declared to exist. This Resolution shall be in full force and effect from and after its passage, adoption and approval by us, as required by law, and is hereby exempted from the referendum provision of the constitu- tion and laws of the State of Arizona pursuant to Section 19-142(B), Arizona Revised Statutes, as amended, and any applicable provision of the Code or any ordinances of the Municipality. 10 PHX 327532448v2 811312007 PASSED by -the Mayor and Common Council of the Town of Marana, Arizona, this 4th day of September, 2007. ATTEST: ................................ Town Clerk, Town of Marana, Arizona APPROVED AS TO FORM: ................................ Town Attorney, Town of Marana, Arizona REVIEWED BY: ................................ Town Manager, Town of Marana, Arizona ATTACHMENTS: EXHIBIT A -- Conformed Copy of Petition for Adoption of this Resolution ......................... : ............ Mayo r , Town of Marana, Arizona PHX 327532448v2 811312007 EXHIBIT "A" CONFORMED COPY OF PETITION FOR ADOPTION OF THIS RESOLUTION A-1 PHX 327532448v2 811312007 SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT AGENDA 11555 W. Civic Center Drive September 4, 2007 - at or after 7:00 p.m. District Board Members: Chairperson Ed Honea Vice Chair Herb Kai Russell Clanagan Patti Comerford Tim Escobedo Carol McGorray Roxanne Ziegler District Clerk Jocelyn C. Bronson 1. CALL TO ORDER A. BOARD ACTION SSCFD Resolution No. 2007-01: Relating to the Saguaro Springs Community Facilities District; taking certain actions with regard to organization of the District; approving the general plan for the District; approving and authorizing the execution and delivery of a District Development, Financing Participation and Intergovernmental Agreement (Saguaro Springs Community Facilities District); approving the preparation of, and authorizing the giving of notice of hearing with respect to approving, a feasibility report which includes identifying the public infrastruc- ture of the projects, the areas to be benefitted, the expected method of financing and the system of providing revenues to operate and maintain the projects, all as provided in such report and ordering and calling an election with respect to issuance of bonds by the District and the levy of an ad valorem property tax therefor and to the levy of a separate ad valorem property tax attributable to the operation and maintenance expenses of the district 11. ADJOURNMENT. 1 CFD DISTRICT BOARD MEETING SAGUARO SPRINGS INFORMATION COMMUNITY FACILITIEs DISTRICT MEETINGDATE: September4,2007 AGENDAITEM: SSCFDA.1 TO: Saguaro Springs CFD Board of Directors FROM: Michael A Reuwsaat, District Manager SUBJECT: Resolution No. SSCFD 2007-01: Relating to the Saguaro Springs Community Facilities District; taking certain actions with regard to organization of the District; approving the general plan for the District; approving and authorizing the execution and delivery of a District Development, Financing Participation and Intergovernmental Agreement (Saguaro Springs Community Facilities District); approving the proposed budget for the District for the remainder of fiscal year 2004-05 and authorizing the giving of notice of hearing with respect thereto; approving the preparation of, and authorizing the giving of notice of hearing with respect to approving, a feasibility report which includes identifying the public infrastructure of the projects, the areas to be benefitted, the expected method of financing and the system of providing revenues to operate and maintain the projects, all as provided in such report and ordering and calling an election with respect to issuance of bonds by the District and the levy of an ad valorem property tax therefor and to the levy of a separate ad valorem property tax attributable to the operation and maintenance expenses of the District DISCUSSION Upon formation of Saguaro Springs Community Facilities District, the District Board must take administrative action to effectuate certain proceedings taken by the Marana Town Council. Upon adoption of this resolution, the District Board will formally approve the following documents: Appointment of Chairperson and Vice Chairperson of the District Board and District Clerk, District Treasurer, District Manager, District Chief Financial officer and District Counsel; Ratification of notification of where notices of meetings will be posted; Approval of General Plan; Approval of District Development Agreement and authorization of execution and delivery thereof, Approval of preparation of (First) Feasibility Report and of publication of Notice of Hearing on such Feasibility Report; and 100000662.DOCIJ Saguaro Springs CFD 812912007110:5 7:58 AMIJCBIFJC 0 Order and call of Bond and Operation and Maintenance Tax Election. Additionally, Resolution No. SSCFD 2007-01 authorizes the District to call an election on October 30, 2007, with respect to the issuance of bonds by the District and the levy of an ad valorem property tax for both debt service and operations and maintenance expenses of the District. While the details of the bond issue are unknown at this time, the combined tax levy may not exceed $2.80 per $ 100 of net secondary assessed valuation. The Development Agreement spells out the terms and conditions of any bond sale and prior to the issuance bonds, the District Board will be presented with the parameters of the bond sale, including collateral to secure the bonds. ATTACHMENT SSCFD District Development, Financing Participation and Intergovernmental Agreement. RECOMMENDATION Staff recommends adoption of Resolution No. SSCFD 2007-01. SUGGESTED MOTION I move to adopt Resolution No. SSCFD 2007-01. (00000662.DOCI) Saguaro Springs CFD 812912007110:29:59 AMIJCBIIFJC -2- RESOLUTION NO. SSCFD 2007-01 RELATING TO THE SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT; TAKING CERTAIN ACTIONS WITH REGARD TO ORGANIZATION OF THE DISTRICT; APPROVING THE GENERAL PLAN FOR THE DISTRICT; APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY OF A DISTRICT DEVELOPMENT, FINANCING PARTICIPATION AND INTERGOVERNMENTAL AGREEMENT (SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT); APPROVING THE PREPARATION OF, AND AUTHORIZING THE GIVING OF NOTICE OF HEARING WITH RESPECT TO APPROVING, A FEASIBILITY REPORT WHICH INCLUDES IDENTIFYING THE PUBLIC INFRASTRUCTURE OF THE PROJECTS, THE AREAS TO BE BENEFITTED, THE EXPECTED METHOD OF FINANCING AND THE SYSTEM OF PROVIDING REVENUES TO OPERATE AND MAINTAIN THE PROJECTS, ALL AS PROVIDED IN SUCH REPORT AND ORDERING AND CALLING AN ELECTION WITH RESPECT TO ISSUANCE OF BONDS BY THE DISTRICT AND THE LEVY OF AN AD VALOREM PROPERTY TAX THEREFOR AND TO THE LEVY OF A SEPARATE AD VALOREM PROPERTY TAX ATTRIBUTABLE TO PHX 32753244lv2 811612007 THE OPERATION AND MAINTENANCE EXPENSES OF THE DISTRICT BE IT RESOLVED BY THE DISTRICT BOARD OF SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT as follows: 1. Findings. a. On September 4, 2007, the Mayor and Common Council of the Town of Marana, Arizona (hereinafter called the "Municipality") , adopted Resolution No. 2007- which, among other things, ordered and declared formation of Saguaro Springs Community Facilities District (hereinafter called the "District"). b. The District is a special purpose district for purposes of Article IX, Section 19, Constitution of Arizona, a tax levying public improvement district for the purposes of Article XIII, Section 7, Constitution of Arizona, and a municipal corporation for all purposes of Title 35, Chapter 3, Articles 3, 3.1., 3.2, 4 and 5, Arizona Revised Statutes, as amended, and, except as otherwise pro- vided in Section 48-708(B), Arizona Revised Statutes, as amended, is considered to be a municipal corporation and political subdivision of the State of Arizona, separate and apart from the Municipality. C. Certain matters relating to the organization of the District must be determined by the district board of the District (hereinafter referred to as the "District Board"). d. There was filed with the Town Clerk of the Municipality the "general plan" for the District, which sets out a general description of the public infrastructure improvements for which the District was formed and the general areas to be improved (hereinafter referred to as the "General Plan"). 2 PHX 32753244lv2 811612007 e. Pursuant to Title 48, Chapter 4, Article 6, Arizona Revised Statutes, as amended (hereinafter referred to as the "Act"), and Section 9-500.05, Arizona Revised Statutes, as amended, the Municipality, the District and Saguaro Reserve, LLC (hereinafter called "Saguaro Reserve"), KB HOME Tucson, Inc. (hereinafter called "KB HOME Tucson") and Empire Land, LLC (hereinafter called "Empire Land") are entering into a "development agreement" to specify, among other things, conditions, terms, restrictions and requirements for public infrastructure (as such term is defined in the Act) and the financing of public infrastructure and subsequent reimbursements or repayments over time. f. With regard to the property which makes up the real property included within the District, the District, Saguaro Reserve, KB HOME Tucson and Empire Land determined to specify some of such matters in such an agreement, particularly matters relating to the acquisition or construction of certain public infrastructure by the District, the acceptance by the Municipality or other appropriate political subdivisions and the reimbursement or repayment of Saguaro Reserve, KB HOME Tucson and Empire Land with respect thereto, all pursuant to the Act. 9. Pursuant to the Act and Title 11, Chapter 7, Article 3, Arizona Revised Statutes, as amended, the District and the Municipality may enter into an "intergovernmental agreement" with one another for joint or cooperative action for services and to jointly exercise any powers common to them and for the purposes of the plan- 3 PHX 32753244 1 v2 811612007 ning, design, inspection, ownership, control, maintenance, operation or repair of public infrastructure. h Pursuant to the Act, the District may also enter into an agreement with Saguaro Reserve, KB HOME Tucson and Empire Land with respect to the advance of moneys for public infrastructure purposes and the repayment of such advances and to obtain credit enhancement for, and process disbursement and investment of proceeds of, the hereinafter-described Bonds. i. There has been placed on file with the District Clerk of the District and presented to the district board of the District (hereinafter called the "District Board") in connection with the purposes described in paragraphs l.e. through h. a District Devel- opmentl Financing Participation and Intergovernmental Agreement (Saguaro Springs Community Facilities District), to be dated as of September 1, 2007 or such other date as the District Manager shall determine (hereinafter referred to as the "Development Agreement"), by and among the Municipality, the District Saguaro Reserve, KB HOME Tucson and Empire Land relating to, among other things, the Bonds. j. Pursuant to Section 48-716, Arizona Revised Statutes, as amended, the District Chief Financial Officer shall be prepared for the District Board a proposed budget (including as part thereof an appropriate capital plan) for the fiscal year 2007-08 (hereinafter referred to as the "Proposed Budget") and shall cause the Proposed Budget to be submitted to the District Board for approval. (Pursuant to Section 48-723(C), Arizona Revised Statutes, the Proposed Budget has been filed with the District Clerk.) A public hearing on 4 PHX 32753244 N2 811612007 the Proposed Budget will hereafter be held (hereinafter referred to as the "Budget Hearing"), after provision for publication of notice thereof as provided by law (hereinafter referred to as the "Budget Hearing Notice"). k. The District is authorized by Section 48-719, Arizona Revised Statutes, as amended, to sell and issue general obli- gation bonds of the District to provide moneys for public infra- structure purposes consistent with the General Plan and (2) by Section 48-709(F), Arizona Revised Statutes, as amended, to repay all or part of fees and charges collected from landowners for public infrastruc- ture purposes, the advance of moneys by landowners for public infra- structure purposes or the granting of real property by the landowner for public infrastructure purposes from the proceeds of such bonds pursuant to agreements entered into with landowners and the Munici- pality pursuant to Section 48-709(A)(10), Arizona Revised Statutes, as amended. 1. Pursuant to Section 48-723, Arizona Revised Statutes, as amended, the District is authorized to levy an ad valorem tax on the assessed value of all real and personal property in the District at a rate which does not exceed the maximum rate specified in the ballot with respect thereto as hereinafter described, including taxes attributable to the operation and maintenance expenses of the District, but not in excess of thirty cents (30?) per one hundred dollars ($100) of such assessed valuation for such operation and maintenance. 5 PHX 32753244 1 v2 811612007 M. Such bonds may not be issued and such tax may not be levied unless approved at an election ordered and called to submit to the qualified electors of the District or to those persons who are qualified to vote pursuant to Section 48-707(G), Arizona Revised Statutes, as amended (being, if no person has registered to vote within the District within fifty (50) days immediately preceding any scheduled election date, the owners of land within the District who are qualified electors of the State of Arizona and other landowners according to Section 48-3043, Arizona Revised Statutes, as amended) the question of authorizing the District Board to issue such bonds for such purposes (hereinafter referred to as the "Bonds") and to levy such tax (hereinafter referred to as the "Operation and Maintenance Expenses Tax"). n. Pursuant to Section 48-715, Arizona Revised Statutes, as amended, the District Board shall cause a report of the feasibility and benefits of the projects relating to certain public infrastructure provided for in the General Plan and to be financed with proceeds of the sale of the first series of the Bonds to be prepared (whether such Bonds are payable from ad valorem taxes, assessments or otherwise), such report having included a description of certain public infrastructure to be acquired and all other information useful to understand the projects, a map showing, in general, the location of the projects, an estimate of the cost to construct, acquire, operate and maintain the projects, an estimated schedule for completion of the projects, a map or description of the area to be benefitted by the projects and a plan for financing the 6 PHX 32753244 1 v2 811612007 projects (hereinafter referred to as the "Report") A public hearing on the Report will hereafter be held (hereinafter referred to as the "Report Hearing") , after provision for publication of notice thereof as provided by law (hereinafter referred to as the "Report Notice"). 2. District Officers and Consultants. The Mayor and the Vice Mayor of the Municipality are hereby appointed "Chairperson" and "Vice Chairperson, " respectively, of the District Board; the Town Clerk of the Municipality is hereby appointed "District Clerk"; the Town Treasurer of the Municipality is hereby appointed "District Treasurer"; the Town Manager of the Municipality is hereby appointed "District Manager"; the Finance Director of the Municipality is hereby appointed "District Chief Financial Officer" and the Attorney of the Municipality is hereby appointed "District Counsel." 3. Posting of Notices. Statements of the District Man- ager directing where all public notices of the meetings of the Dis- trict shall be posted in substantially the forms attached hereto and marked as Exhibit "A" have been provided to those indicated therein and are hereby approved and ratified for all purposes thereof. 4. Approval of General Plan. The General Plan as previ- OU31Y submitted to the Town Clerk of the Municipality is hereby approved in all respects. 5. a . Approval of Develo2ment Agreement. The Develop- ment Agreement is hereby approved in substantially the form submitted herewith, with such changes, additions, deletions, insertions and omissions, if any, as the Chairperson of the District Board, with the advice of the District Manager and the District Counsel, shall author- 7 PHX 32753244 1 v2 811612007 ize, the execution and delivery of the Development Agreement to be conclusive evidence of the propriety of such document and the author- ity of the person or persons executing the same. b. Completion of Development Agreement. The Dis- trict Manager or his or her designee is hereby authorized to complete the Development Agreement by including the appropriate materials as necessary therein. C. Execution of Development Agreement. The Chair- person of the District Board, with the advice of the District Manager and the District Counsel, is hereby authorized and directed to exe- cute, and the District Clerk to attest, the Development Agreement on behalf of the District. 6. a. Preparation of Report. The preparation of the Report is hereby approved. (Upon completion of a draft of the Report, the Report, marked in a conspicuous fashion "DRAFT," shall be sub- mitted to the District Board for review and comment.) b. Approval of Notice of Hearing on Report. The Report Hearing is hereby ordered as required by law, and the District Manager is hereby instructed to establish the date and time of such hearing and to cause the Report Hearing Notice to be provided by law. The form of the Report Hearing Notice attached hereto and marked as Exhibit "C" is hereby approved in all respects as well as the publica- tion of the Report Hearing Notice and the mailing of the Report to the governing body of the Municipality. (The District Manager is hereby authorized to complete the Report Hearing Notice prior to its publica- tion.) 8 PHX 32753244lv2 811612007 7. a . Order and Call of Election. A special election be and the same is hereby ordered and called to be held on October 30, 2007 (hereinafter referred to as the "Election") , at which time there shall be submitted to those who will be qualified electors of the District the question with respect to the Bonds and the operations and Maintenance Expenses Tax set forth in the official ballot described in Section 8c. of this Resolution. b. Posting and Publishing of Matters Relatinq to Election. The Election shall be called by posting notices in three (3) public places within the proposed boundaries of the District not less than twenty (20) days before the date of the Election in substan- tially the form hereto attached and marked Exhibit "D." Notice shall also be published in the Daily Territorial, a newspaper of general circulation in the Municipality, once a week for two consecutive weeks before the Election in substantially the form hereto attached and marked Exhibit "D." C. Form of Ballot. The official. ballot for the Election shall be in substantially the form hereto attached and marked Exhibit "E." d. Polling Place. The polling place and the time the polls shall be opened and closed shall be as provided in Exhibit 11 D. Tv While outside the boundaries of the District, the District Board hereby finds that such polling place is appropriate as it is the polling place for the precinct in which the area of the District is included for County-wide elections. 9 PHX 32753244lv2 811612007 e. Affidavit of Landowners. Prospective electors voting in the Election shall execute an affidavit substantially in the form hereto attached and marked Exhibit "F." f. Preparation of Ballots and Affidavits. The District Clerk is hereby authorized and directed to have printed and delivered to the election officers at such polling places such ballots and, if necessary, such affidavits, to be by them furnished to the qualified electors of the District offering to vote at the Election, in substantially the forms as hereto attached and marked Exhibits "E" and "F. 11 9- Compliance with Voting Rights Act of 1965. In order to comply with the Voting Rights Act of 1965, as amended, the following shall be translated into Spanish and posted, published and recorded in each instance where posting, publication and recording of such proceedings are required, to wit: Exhibits "D," "E" and "F," all absentee/early voting materials and ail instructions at the polls. h. Applicable Law. The Election shall be held, con- ducted and canvassed in conformity with the provisions of the general election laws of the State of Arizona, except as otherwise provided by law, and only such persons shall be permitted to vote at the Election who are the qualified electors. Absentee/early voting shall be per- mitted in accordance with the provisions of Title 16, Chapter 4, Article 8, Arizona Revised Statutes, as amended. i. Canvassing. Within fourteen (14) days after the date of the Election, the District Board shall meet and canvass the returns, and if a majority of the votes cast at the Election are in 10 PHX 32753244lv2 811612007 favor of issuing the Bonds and levying the Operations and Maintenance Expenses Tax, the District Board shall enter the fact on its minutes. 8. No Liability of or for the Municipality. Neither the Municipality nor the State of Arizona or any political subdivision of either (other than the District) shall be directly, indirectly or morally liable or obligated for the payment or repayment of any indebtedness, liability, cost, expense or obligation of the District, and neither the credit nor the taxing power of the Municipality, the State of Arizona or any political subdivision of either (other than the District) shall be pledged therefor. PHX 32 753244 1 V2 81161200 7 11 9. Severability; Amendment. a. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unen- forceable, the invalidity or unenforceability of such section, para- graph, clause or provision shall not affect any of the remaining pro- visions of this Resolution. b. All resolutions or parts thereof inconsistent herewith are hereby waived to the extent only of such inconsistency. 10. Effective Date. This Resolution shall be effective immediately. 12 PHX 32753244 1 v2 811612007 PASSED by the District Board of Saguaro Springs Community Facilities District this 4t" day of September, 2007. ATTEST: ................................ Dist r ict Clerk, Saguaro Springs Community Facilities District APPROVED AS TO FORM: ................................ District Counsel, Saguaro Springs Community Facilities District ATTACHMENT: ............... Chairperson, District Board, Saguaro Springs Community Facilities District EXHIBIT "A" Forms of Statements Regarding Posting Of Public Meeting s EXHIBIT " B Form of Budget Hearing Notice EXHIBIT " C Form Of Report Hearing Notice EXHIBIT "D" Form of Notice of Election EXHIBIT " E " Form of Official Ballot EXHIBIT "F" Form of Affidavit of Elector 13 PHX 32753244 1 v2 811612007 EXHIBIT "A" FORMS OF STATEMENTS REGARDING POSTING OF PUBLIC MEETINGS SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT c/o Town of Marana, Arizona 11555 North Civic Center Drive Marana, Arizona 85653 September 5, 2007 Lori Godoshian, Clerk Board of Supervisors of Pima County Fifth Floor, 130 West Congress Tucson, Arizona 85701 TO: Clerk of the Board of Supervisors of Pima County, Arizona, and the Clerk of Pima County, Arizona Pursuant to A.R.S. Section 38-431.02, the District Board of Saguaro Springs Community Facilities District hereby states that all notices of its meetings will be posted at the official bulletin boards of the Town of Marana, Arizona, for posting notices which are located at the following locations: Marana Town Hall: 11555 North Civic Center Drive Marana, Arizona 85653 0 Marana Police Department: Marana Development Services Center: 11555 West Civic Center Drive Marana, Arizona 85653 11555 North Civic Center Drive Marana, Arizona 85653 which notices will be available for viewing by the public 24 hours a day. Such notices will indicate the date, time and place of the meeting and will include an agenda or information concerning the manner in which the public may obtain an agenda for the meeting. SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT By .................................... District Manager A-1 PHX 32753244 1 v2 811612007 SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT c/o Town of Marana, Arizona 11555 North Civic Center Drive Marana, Arizona 85653 September 5, 2007 Ms. Jan Brewer Secretary of State 14 North 18th Avenue Phoenix, Arizona 85007 TO: Secretary of State of the State of Arizona and the Citizens of the State of Arizona Pursuant to A.R.S. Section 38-431.02, the District Board of Saguaro Springs Community Facilities District hereby states that all notices of its meetings will be posted at the official bulletin boards of the Town of Marana, Arizona, for posting notices which are located at the following locations: 0 Marana Town Hall: 11555 North Civic Center Drive Marana, Arizona 85653 0 Marana Police Department Marana Development Services Center: 11555 West Civic Center Drive Marana, Arizona 85653 11555 North Civic Center Drive Marana, Arizona 85653 which notices will be available for viewing by the public 24 hours a day. Such notices will indicate the date, time and place of the meeting and will include an agenda or information concerning the manner in which the public may obtain an agenda for the meeting. SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT By .................................... District Manager A-2 PHX32753244lv2811612007 SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT c/o Town of Marana, Arizona 11555 North Civic Center Drive Marana, Arizona 85653 September 5, 2007 Ms. Jocelyn C. Bronson Town Clerk Town of Marana, Arizona 11555 North Civic Center Drive Marana, Arizona 85653 TO: Clerk of the Town of Marana, Arizona, and the Citizens of the Town of Marana, Arizona Pursuant to A.R.S. Section 38-431.02, the District Board of Saguaro Springs Community Facilities District hereby states that all notices of its meetings will be posted at the official bulletin boards of the Town of Marana, Arizona, for posting notices which are located at the following locations: 0 Marana Town Hall: 11555 North Civic Center Drive Marana, Arizona 85653 0 Marana Police Department Marana Development Services Center: 11555 West Civic Center Drive Marana, Arizona 85653 11555 North Civic Center Drive Marana, Arizona 85653 which notices will be available for viewing by the public 24 hours a day. Such notices will indicate the date, time and place of the meeting and will include an agenda or information concerning the manner in which the public may obtain an agenda for the meeting. SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT By .................................... District Manager A-3 PHX 32753244 1 v2 811612007 EXHIBIT "B" FORM OF BUDGET HEARING NOTICE NOTICE FOR HEARING REQUIRED BY A.R.S. § 48-716 AND § 48-723(C) ON THE BUDGET FOR FISCAL YEAR 2007-08 FOR SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT Pursuant to Sections 48-716 and 48-723(C), Arizona Revised Statutes, as amended, notice is hereby given that a public hearing on the budget for fiscal year 2007-08 for Saguaro Springs Community Facilities District will be held by the District Board on ............ .... 1 2007, at approximately ..... p.m. (Arizona time), or immediately preceding the meeting of the Mayor and Common Council of the Town of Marana, Arizona, on the same date in the Council Chambers located at 11555 North Civic Center Drive, Marana, Arizona. Such budget and further information relating thereto are available from the Town Clerk of the Town of Marana, Ari zona/Di strict Clerk of Saguaro Springs Community Facilities District, 11555 North Civic Center Drive, Marana, Arizona 85653, telephone number: (520) 382-1900. Dated this ........ day of ................ 2007. /s/ .: ............. District Manage*,*Saguaro'Spr:,***,*** r ings Community Facilities District B-1 PHX 32753244 1 V2 811612007 EXHIBIT "C" FORM OF REPORT HEARING NOTICE NOTICE FOR HEARING REQUIRED BY A.R.S. § 48-715 ON REPORT OF THE FEASIBILITY AND BENEFITS OF CERTAIN PROJECTS TO BE FINANCED WITH THE PROCEEDS OF THE SALE OF GENERAL OBLIGATION BONDS OF SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT Pursuant to Section 48-715, Arizona Revised Statutes, as amended, notice is hereby given that a public hearing on the report of the feasibility and benefits of projects to be financed with the proceeds of the sale of general obligation bonds of Saguaro Springs Community Facilities District shall be held by the District Board on ............... 1 2007, at approximately ..... p.m. (Arizona time), or immediately preceding the meeting of the Mayor and Common Council of the Town of Marana, Arizona, on the same date in the Council Chambers located at 11553 North Civic Center Drive, Marana, Arizona. Such feasibility report and further information relating thereto are on file with the Town Clerk of the Town of Marana, Arizona/District Clerk of Saguaro Springs Community Facilities District, 11555 North Civic Center Drive, Marana, Arizona 85653f telephone number: (520) 382-1900. Dated this ........ day of ................ 2007. /s/ .: ................. S ......... : ........ Dist r ict Manage r , aguaro Springs Community Facilities District C-1 PHX 32753244lv2 811612007 EXHIBIT "D" FORM OF NOTICE OF ELECTION TO THE QUALIFIED RESIDENT AND LANDOWNER ELECTORS OF SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT (THE "DISTRICT"): A special election to establish certain matters will be held on October 30, 2007, at the following precinct's polling place, such precinct being the precinct in which the area within the District is located: Precinct Polling Place Marana 11555 North Civic Center Drive Marana, Arizona 85653 The polling place will open at 8:00 a.m. and close at 2:00 p.m. The purpose of the election is to permit those who would be the qualified resident and landowner electors of the District to vote on the following questions: SHALL THE DISTRICT BOARD (THE "BOARD") OF SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT (THE "DISTRICT") BE AUTHORIZED TO ISSUE GENERAL OBLI- GATION BONDS OF THE DISTRICT, IN THE DENOMINATION OF THE BONDS, THE SIZE OF EACH ISSUE AND THE FORM OF THE BONDS PRESCRIBED, AND HAVING THE MATURI- TIES (NOT EXCEEDING TWENTY-FIVE (25) YEARS), INTEREST PAYMENT DATES AND INTEREST RATES, WHETHER FIXED OR VARIABLE, NOT EXCEEDING TWELVE PERCENT (12%) PER ANNUM, ESTABLISHED, BY THE BOARD AND CONTAINING SUCH TERMS, CONDITIONS, COVENANTS AND AGREEMENTS AS THE BOARD DEEMS PROPER, IN THE MAXIMUM AMOUNT OF $99,000,000 TO PROVIDE MONEYS (A)(1) FOR PLANNING, DESIGN, ENGINEERING, CONSTRUCTION, ACQUISITION OR INSTALLATION OF ANY OR ALL OF THE FOLLOWING IMPROVEMENTS, INCLUDING NECESSARY OR INCIDENTAL WORK, WHETHER NEWLY CONSTRUCTED, RENOVATED OR EXISTING, AND ALL NECESSARY OR DESIRABLE APPURTENANCES ("PUBLIC INFRASTRUCTURE"): (a) SANITARY SEWAGE SYSTEMS, INCLUDING COLLECTION, TRANSPORT, STORAGE, TREATMENT, DISPERSAL, EFFLUENT USE AND DISCHARGE, (b) DRAINAGE AND FLOOD CONTROL SYSTEMS, INCLUDING COLLECTION, TRANSPORT, DIVERSION, STORAGE, DETEN- TION, RETENTION, DISPERSAL, USE AND DISCHARGE, (c) WATER SYSTEMS FOR DOMESTIC, INDUSTRIAL, IRRI- GATION, MUNICIPAL OR FIRE PROTECTION PURPOSES D-1 PHX 32753244lv2 811612007 INCLUDING PRODUCTION, COLLECTION, STORAGE, TREAT- MENT, TRANSPORT, DELIVERY, CONNECTION AND DISPER- SAL, BUT NOT INCLUDING FACILITIES FOR AGRICUL- TURAL IRRIGATION PURPOSES UNLESS FOR THE. REPAIR OR REPLACEMENT OF EXISTING FACILITIES WHEN REQUIRED BY OTHER IMPROVEMENTS DESCRIBED HEREIN, (d) HIGHWAYS, STREETS, ROADWAYS AND PARKING FACILITIES INCLUDING ALL AREAS FOR VEHICULAR USE FOR TRAVEL, INGRESS AND EGRESS, (e) AREAS FOR PEDESTRIAN, EQUESTRIAN, BICYCLE OR OTHER NON- MOTOR VEHICLE USE FOR TRAVEL, INGRESS, EGRESS AND PARKING, (f) PEDESTRIAN MALLS, PARKS, RECREA- TIONAL FACILITIES, AND OPEN SPACE AREAS FOR THE USE OF MEMBERS OF THE PUBLIC FOR ENTERTAINMENT, ASSEMBLY AND RECREATION, (g) LANDSCAPING INCLUD- ING EARTHWORKS, STRUCTURES, LAKES AND OTHER WATER FEATURES, PLANTS, TREES AND RELATED WATER DELIV- ERY SYSTEMS, (h) PUBLIC BUILDINGS, PUBLIC SAFETY FACILITIES AND FIRE PROTECTION FACILITIES, (i) LIGHTING SYSTEMS, (j) TRAFFIC CONTROL SYSTEMS AND DEVICES INCLUDING SIGNALS, CONTROLS, MARKINGS AND SIGNAGE, (k) SCHOOL SITES AND FACILITIES AND (1) EQUIPMENT, VEHICLES, FURNISHINGS AND OTHER PERSONALTY RELATED TO ANY OF THE FOREGOING; (2) ACQUIRING, CONVERTING, RENOVATING OR IMPROV- ING EXISTING FACILITIES FOR PUBLIC INFRASTRUC- TURE; (3) ACQUIRING INTERESTS IN REAL PROPERTY FOR PUBLIC INFRASTRUCTURE; (4) ESTABLISHING, MAINTAINING AND REPLENISHING RESERVES FROM ANY SOURCE IN ORDER TO SECURE PAYMENT OF DEBT SERVICE ON BONDS; (5) FUNDING AND PAYING FROM BOND PRO- CEEDS INTEREST ACCRUING ON BONDS FOR A PERIOD OF NOT TO EXCEED THREE (3) YEARS FROM THEIR DATE OF ISSUANCE; (6) PROVIDING FOR THE TIMELY PAYMENT OF DEBT SERVICE ON BONDS OR OTHER INDEBTEDNESS OF THE DISTRICT; (7) REFINANCING ANY MATURED OR UNMATURED BONDS, WITH NEW BONDS; AND (8) EXPENSES OF THE DISTRICT INCIDENT TO AND REASONABLY NECES- SARY TO CARRY OUT THE PURPOSES SPECIFIED IN THIS PARAGRAPH (CLAUSES (1) THROUGH (8), BOTH INCLU- SIVE, BEING "PUBLIC INFRASTRUCTURE PURPOSES") AND (B) FOR REPAYING ALL OR PART OF FEES OR CHARGES COLLECTED FROM LANDOWNERS FOR PUBLIC INFRASTRUC- TURE PURPOSES, THE ADVANCE OF MONEYS BY LAND- OWNERS FOR PUBLIC INFRASTRUCTURE PURPOSES OR THE GRANTING OF REAL PROPERTY BY THE LANDOWNER FOR PUBLIC INFRASTRUCTURE PURPOSES PURSUANT TO AGREE- MENTS ENTERED INTO WITH LANDOWNERS AND THE TOWN OF MARANA, ARIZONA, PURSUANT TO SECTION 48-709 (A) (10) , ARIZONA REVISED STATUTES, AS AMENDED, AND IN AN AMOUNT NOT IN EXCESS OF ONE AND ONE- HALF (11-2) TIMES THE AMOUNT OF BONDS PREVIOUSLY ISSUED BY THE DISTRICT FOR THE PURPOSE OF D-2 PHX 32753244 1 v2 811612007 REFUNDING ANY BONDS ISSUED BY THE DISTRICT FOR EITHER OF THE FOREGOING PURPOSES, PAYABLE FROM AN AD VALOREM TAX LEVIED AND COLLECTED ANNUALLY ON ALL TAXABLE PROPERTY IN THE DISTRICT, SUFFICIENT TO PAY DEBT SERVICE ON SUCH BONDS WHEN DUE, AS AUTHORIZED BY THE CONSTITUTION AND LAWS OF THE STATE OF ARIZONA, INCLUDING PARTICULARLY (BUT NOT BY WAY OF LIMITATION) TITLE 48, CHAPTER 4, ARTI- CLE 6, ARIZONA REVISED STATUTES, TOGETHER WITH ALL AMENDMENTS AND ADDITIONS THERETO? SHALL THE DISTRICT BOARD OF SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT (THE "DISTRICT") BE AUTHORIZED TO LEVY AND COLLECT AN ANNUAL AD VALOREM TAX ON THE ASSESSED VALUE OF ALL REAL AND PERSONAL PROPERTY IN THE DISTRICT AT A RATE NOT TO EXCEED THIRTY CENTS (30?) PER ONE HUNDRED DOLLARS ($100) OF ASSESSED VALUATION OF ALL REAL AND PERSONAL PROPERTY IN THE DISTRICT, ALL ATTRIBUTABLE TO THE OPERATION AND MAINTENANCE EXPENSES OF THE DISTRICT, IN ACCORDANCE WITH THE CONSTITUTION AND LAWS OF THE STATE OF ARIZONA, INCLUDING PARTICULARLY (BUT NOT BY WAY OF LIMITA- TION) SECTION 48-723, ARIZONA REVISED STATUTES, AS AMENDED? Absentee/early voting shall be permitted in accordance with the provi- sions of Title 16, Chapter 4, Article 8, Arizona Revised Statutes, as amended. Absentee/early voting information may be obtained by con- tacting the office of the District Clerk, 11555 North Civic Center Drive, Marana, Arizona 85653, telephone number (520) 382-1900. The "general plan" for the District required by Section 48-702(A) (8), Arizona Revised Statutes, as amended, is on file with the District Clerk at the same location described in the preceding paragraph. D-3 PHX 32753244 Iv2 811612007 EXHIBIT "E" FORM OF OFFICIAL BALLOT OFFICIAL BALLOT SPECIAL BOND ELECTION SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT October 30, 2007 SHALL THE DISTRICT BOARD (THE "BOARD") OF SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT (THE "DISTRICT FARMS") BE AUTHORIZED TO ISSUE GENERAL OBLIGATION BONDS OF THE DISTRICT, IN THE DENOMIN- ATION OF THE BONDS, THE SIZE OF EACH ISSUE AND THE FORM OF THE BONDS PRESCRIBED, AND HAVING THE MATURITIES (NOT EXCEEDING TWENTY-FIVE (25) YEARS), INTEREST PAYMENT DATES AND INTEREST RATES, WHETHER FIXED OR VARIABLE, NOT EXCEEDING TWELVE PERCENT (12%) PER ANNUM, ESTABLISHED, BY THE BOARD AND CONTAINING SUCH TERMS, CONDITIONS, COVENANTS AND AGREEMENTS AS THE BOARD DEEMS PROPER, IN THE MAXIMUM AMOUNT OF $99,000,000 TO PROVIDE MONEYS (A)(1) FOR PLANNING, DESIGN, ENGINEERING, CONSTRUCTION, ACQUISITION OR INSTALLATION OF ANY OR ALL OF THE FOLLOWING IMPROVEMENTS, INCLUDING NECESSARY OR INCIDENTAL WORK, WHETHER NEWLY CONSTRUCTED, RENOVATED OR EXISTING, AND ALL NECESSARY OR DESIRABLE APPURTENANCES ("PUBLIC INFRASTRUCTURE"): (a) SANITARY SEWAGE SYSTEMS, INCLUDING COLLECTION, TRANSPORT, STORAGE, TREATMENT, DISPERSAL, EFFLUENT USE AND DISCHARGE, (b) DRAINAGE AND FLOOD CONTROL SYSTEMS, INCLUDING COLLECTION, TRANSPORT, DIVERSION, STORAGE, DETEN- TION, RETENTION, DISPERSAL, USE AND DISCHARGE, (c) WATER SYSTEMS FOR DOMESTIC, INDUSTRIAL IRRIGATION, MUNICIPAL OR FIRE PROTECTION PURPOSES INCLUDING PRODUCTION, COLLECTION, STORAGE, TREAT- MENT, TRANSPORT, DELIVERY, CONNECTION AND DISPER- SAL, BUT NOT INCLUDING FACILITIES FOR AGRICUL- TURAL IRRIGATION PURPOSES UNLESS FOR THE REPAIR OR REPLACEMENT OF EXISTING FACILITIES WHEN REQUIRED BY OTHER IMPROVEMENTS DESCRIBED HEREIN, (d) HIGHWAYS, STREETS, ROADWAYS AND PARKING FACILITIES INCLUDING ALL AREAS FOR VEHICULAR USE FOR TRAVEL, INGRESS AND EGRESS, (e) AREAS FOR PEDESTRIAN, EQUESTRIAN, BICYCLE OR OTHER NON- MOTOR VEHICLE USE FOR TRAVEL, INGRESS, EGRESS AND PARKING, (f) PEDESTRIAN MALLS, PARKS, RECREA- E-1 PHX 32753244 IV2 811612007 TIONAL FACILITIES, AND OPEN SPACE AREAS FOR THE USE OF MEMBERS OF THE PUBLIC FOR ENTERTAINMENT, ASSEMBLY AND RECREATION, (g) LANDSCAPING INCLUD- ING EARTHWORKS, STRUCTURES, LAKES AND OTHER WATER FEATURES, PLANTS, TREES AND RELATED WATER DELIV- ERY SYSTEMS, (h) PUBLIC BUILDINGS, PUBLIC SAFETY FACILITIES AND FIRE PROTECTION FACILITIES, (i) LIGHTING SYSTEMS, (j) TRAFFIC CONTROL SYSTEMS AND DEVICES INCLUDING SIGNALS, CONTROLS, MARKINGS AND SIGNAGE, (k) SCHOOL SITES AND FACILITIES AND (1) EQUIPMENT, VEHICLES, FURNISHINGS AND OTHER PERSONALTY RELATED TO ANY OF THE FOREGOING; (2) ACQUIRING, CONVERTING, RENOVATING OR IMPROV- ING EXISTING FACILITIES FOR PUBLIC INFRASTRUC- TURE; (3) ACQUIRING INTERESTS IN REAL PROPERTY FOR PUBLIC INFRASTRUCTURE; (4) ESTABLISHING, MAINTAINING AND REPLENISHING RESERVES FROM ANY SOURCE IN ORDER TO SECURE PAYMENT OF DEBT SERVICE ON BONDS; (5) FUNDING AND PAYING FROM BOND PROCEEDS INTEREST ACCRUING ON BONDS FOR A PERIOD OF NOT TO EXCEED THREE (3) YEARS FROM THEIR DATE OF ISSUANCE; (6) PROVIDING FOR THE TIMELY PAYMENT OF DEBT SERVICE ON BONDS OR OTHER INDEBTEDNESS OF THE DISTRICT; (7) REFINANCING ANY MATURED OR UNMATURED BONDS, WITH NEW BONDS; AND (8) EXPENSES OF THE DISTRICT INCIDENT TO AND REASONABLY NECESSARY TO CARRY OUT THE PURPOSES SPECIFIED IN THIS PARAGRAPH (CLAUSES (1) THROUGH (8), BOTH INCLUSIVE, BEING "PUBLIC INFRASTRUCTURE PUR- POSES") AND (B) FOR REPAYING ALL OR PART OF FEES OR CHARGES COLLECTED FROM LANDOWNERS FOR PUBLIC INFRASTRUCTURE PURPOSES, THE ADVANCE OF MONEYS BY LANDOWNERS FOR PUBLIC INFRASTRUCTURE PURPOSES OR THE GRANTING OF REAL PROPERTY BY THE LANDOWNER FOR PUBLIC INFRASTRUCTURE PURPOSES PURSUANT TO AGREEMENTS ENTERED INTO WITH LANDOWNERS AND THE TOWN OF MARANA, ARIZONA, PURSUANT TO SECTION 48-709 (A)(10), ARIZONA REVISED STATUTES, AS AMENDED, AND IN AN AMOUNT NOT IN EXCESS OF ONE AND ONE-HALF (1;-2) TIMES THE AMOUNT OF BONDS PREVIOUSLY ISSUED BY THE DISTRICT FOR THE PURPOSE OF REFUNDING ANY BONDS ISSUED BY THE DISTRICT FOR EITHER OF THE FOREGOING PURPOSES, PAYABLE FROM AN AD VALOREM TAX LEVIED AND COLLECTED ANNUALLY ON ALL TAXABLE PROPERTY IN THE DISTRICT, SUFFICIENT TO PAY DEBT SERVICE ON SUCH BONDS WHEN DUE, AS AUTHORIZED BY THE CONSTITUTION AND LAWS OF THE STATE OF ARIZONA, INCLUDING PARTICULARLY (BUT NOT BY WAY OF LIMITATION) TITLE 48, CHAPTER 4, ARTI- CLE 6, ARIZONA REVISED STATUTES, TOGETHER WITH ALL AMENDMENTS AND ADDITIONS THERETO? PHX 32753244 1 v2 811612007 E-2 Place an "X" in the box beside the way you wish to vote. BONDS, YES BONDS, NO SHALL THE DISTRICT BOARD OF SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT (THE "DISTRICT") BE AUTHORIZED TO LEVY AND COLLECT AN ANNUAL AD VALOREM TAX ON THE ASSESSED VALUE OF ALL REAL AND PERSONAL PROPERTY IN THE DISTRICT AT A RATE NOT TO EXCEED THIRTY CENTS (30?) PER ONE HUNDRED DOLLARS ($100) OF ASSESSED VALUATION OF ALL REAL AND PERSONAL PROPERTY IN THE DISTRICT, ALL ATTRIBUTABLE TO THE OPERATION AND MAINTENANCE EXPENSES OF THE DISTRICT, IN ACCORDANCE WITH THE CONSTITUTION AND LAWS OF THE STATE OF ARIZONA, INCLUDING PARTICULARLY (BUT NOT BY WAY OF LIMITATION) SECTION 48-723, ARIZONA REVISED STATUTES, AS AMENDED? Place an "X" in the box beside the way you wish to vote. TAX, YES TAX, NO E-3 PHX32753244lv2811612007 EXHIBIT "F" FORM OF AFFIDAVIT OF ELECTOR AFFIDAVIT OF PROSPECTIVE ELECTOR AS TO OWNERSHIP OF LAND OR OTHER QUALIFICATION TO VOTE PURSUANT TO SECTIONS 16-121 AND 48-3043, ARIZONA REVISED STATUTES, AS AMENDED STATE OF ARIZONA COUNTY OF PIMA TOWN OF MARANA, ARIZONA ss. SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT COMES NOW the undersigned and deposes and says "I am (place a mark next to 1, 2 or 3 to indicate your eligibility) 1. a qualified elector in ............................... precinct and resident at ............................. where I resided at the date of my registration, OR 2. a qualified elector in ............................... precinct and resident at .............................. where I resided at the date of my registration, AND a qualified voter pursuant to § 48-3043 (complete section 4) OR 3. a qualified voter pursuant to § 48-3043 (complete section 4) 4. 1 am an owner of land in the community facilities district to which this affidavit applies who is a qualified elector of such district; or otherwise qualified to vote pursuant to Section 48-3043, Arizona Revised Statutes, as amended (being a bona fide owner of land within the district holding title or evidence of title of record, including: an entrymen upon public lands under the public land laws of the United States or a certificate of purchase from the State of Arizona, who has held such title for ninety (90) days and who is a resident of the State of Arizona; when the holder of record title is a married person, the spouse in whose name the title stands; if record title is held in more than one name, an owner otherwise possessing the qualifications of an elector voting the number of fractions of acres represented by my legal interest or proportionate share of and in the lands; the administrator or executor of a deceased person or the guard- ian of a minor or an incompetent person, appointed and qualified under the laws of the State of Arizona, representing such person or estate; an officer of a corporation designated and authorized by a resolution of the Board of Directors of the corporation F-1 PHX 32753244 1 v2 811612007 representing the corporation; the general partner of a partner- ship in whose name title to property within the district is vested as a holder of title or evidence of title, who is desig- nated and authorized in writing by all of the general partners; or the trustee of a trust or the trustee who is designated and authorized in writing by all of the trustees of a trust in which there is more than one trustee, in whose name title to property within such district is vested as a holder of title or evidence of title)." My vote represents .......... acres OR ......... square feet. ....................................... Signature of Affiant ...................................... P r inted Name of Affiant ...................................... Printed Name of Entity Represented by Affiant, if any SUBSCRIBED AND SWORN to before me this 3 oth day of October, 2007. ...................................... Election Board Member TO BE COMPLETED BY AN ELECTION BOARD MEMBER ONLY: Ballot Stub No . ..... F-2 PHX 32753244lv2 811612007 When recorded, please return to: John S. Overdorff, Esq. Greenberg Traurig, LLP Suite 700 2375 East Camelback Road Phoenix, Arizona 85016 DISTRICT DEVELOPMENT, FINANCING PARTICIPATION AND INTERGOVERNMENTAL AGREEMENT (SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT) ARTICLE I DEFINED TERMS; MISCELLANEOUS MATTERS RELATING TO USE THEREOF .................................... 6 ARTICLE ...... II CONSTRUCTION OF PROJECTS BY THE DISTRICT; . ACQUISITION OF PLANS AND SPECIFICATIONS .............. 15 ARTICLE III CONSTRUCTION OF ACQUISITION PROJECTS BY THE OWNER; CERTAIN MATTERS RELATED TO PLANS AND SPECIFICATIONS ....................................... 18 ARTICLE IV ACQUISITION OF ACQUISITION PROJECTS FROM THE OWNER ......... 2 ARTICLE ....................................... V FINANCING OF COSTS OF PROJECTS AND PLANS AND 2 SPECIFICATIONS ....................................... 24 ARTICLE VI MATTERS RELATING TO THE DEVELOPER BONDS AND OTHER OBLIGATIONS OF THE DISTRICT; PROVISIONS RELATED TO GENERAL OBLIGATION BONDS AND SPECIAL ASSESSMENT BONDS ..................................... 28 ARTICLE VII ACCEPTANCE BY THE MUNICIPALITY ....................... 41 ARTICLE VIII INDEMNIFICATION ...................................... 42 ARTICLE IX PAYMENT OF CERTAIN EXPENSES AND COSTS ................ 46 ARTICLE X MISCELLANEOUS ........................................ 49 SIGNATURES .................................................... 55 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY .................. A-1 EXHIBIT B DESCRIPTION OF CERTAIN INFRASTRUCTURE . ............. B-1 EXHIBIT C FORM OF CERTIFICATE OF ENGINEERS FOR CONVEYANCE OF SEGMENT OF ACQUISITION PROJECT ..... C-1 EXHIBIT D FORM OF CONVEYANCE OF SEGMENT OF ACQUISITION PROJECT ................ ............. D-1 EXHIBIT E FORM OF DISCLOSURE STATEMENT .......... ............. E-1 PHX 327532401 v4 8/27/2007 THIS DISTRICT DEVELOPMENT, FINANCING PARTICIPATION AND INTERGOVERNMENTAL AGREEMENT (SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT) , dated as of r 2007 (hereinafter referred to as this "Agreement") , is being entered into by and among the Town of Marana, Arizona, a municipality duly incorporated and validly existing pursuant to the laws of the State of Arizona (hereinafter referred to as the "Municipality"); Saguaro Springs Community Facilities District, a community facilities district formed by the Municipality, and duly organized and validly existing, pursuant to the laws of the State of Arizona (hereinafter referred to as the "District") ; Saguaro Reserve, LLC, a limited liability company duly incorporated and validly existing pursuant to the laws of the State of Delaware (hereinafter referred to as "Saguaro Reserve"); KB HOME Tucson, Inc., an Arizona corporation duly organized and validly existing pursuant to the laws of the State of Arizona and having an interest in certain property within the boundaries of the District (hereinafter referred to as "KB Home Tucson"), and Empire Land, LLC, a limited liability company duly organized and validly existing pursuant to the laws of the State of California and having an interest in certain property within the boundaries of the District (hereinafter referred to as "Empire Land"). First American Title Insurance Company, a California corporation duly formed and validly existing pursuant to the laws of California and duly authorized to do business in the State of Arizona, as Trustee under Trust #9089 and Trust #9092 ("FATCO-) holds fee title all or substantially all of the real property in the District. FATCO and other persons having an interest in any real property within the 2 PHX 32753240lv4 8/27/2007 District have acknowledged and agreed to the terms and provisions of this Agreement and have consented to the recording of this Agreement as a binding encumbrance against their respective property or interest, by the execution of the Consent and Agreement attached hereto. W I T N E S S E T H: WHEREAS, pursuant to Title 48, Chapter 4, Article 6, Arizona Revised Statutes, as amended (hereinafter referred to as the "Act"), and Section 9-500.05, Arizona Revised Statutes, as amended, the Municipality, the District, Saguaro Reserve, KB Home Tucson and Empire Land enter into this Agreement as a "development agreement" to specify, among other things, conditions, terms, restrictions and requirements for "public infrastructure" (as such term is defined in the Act) and the financing of public infrastructure and subsequent reimbursements or repayments over time from funds derived from the District's sale of the hereinafter defined Developer Bonds; and WHEREAS, with regard to the real property described in Exhibit "A" hereto (hereinafter referred to as the "Property") which makes up the real property included within the District, the Munici- pality, the District, Saguaro Reserve, KB Home Tucson and Empire Land determined to specify some of such matters in this Agreement, particu- larly matters relating to the construction or acquisition of certain public infrastructure by the District, the acceptance thereof by the Municipality and the reimbursement or repayment of Saguaro Reserve with respect thereto, from both Developer GO Bonds and Assessment 3 PHX 32753240lv4 8/27/2007 Bonds, all pursuant to the Act, such public infrastructure being necessary for Saguaro Reserve to develop the Property prior to the time at which the District will have the necessary funds to itself pay for the construction and/or acquisition thereof; and WHEREAS, this Agreement as a "development agreement" is consistent with the "general plan" of the Municipality, as defined in Section 9-461, Arizona Revised Statutes, as amended, applicable to the Property on the date this Agreement is executed; and WHEREAS, pursuant to an election to hereinafter be held in and for the District, questions authorizing the district board of the District (i) to issue certain general obligation bonds of the District in an amount not to exceed $99,000,000, including to provide moneys for certain "public infrastructure purposes" (as such term is defined in the Act) described in the General Plan of the District heretofore approved by the Municipality and the District and in this Agreement (hereinafter referred to as the "GO Bonds") including the levy, assessment and collection of a debt service tax against all real and personal property in the District, unlimited as to rate or amount therefor, and (ii) to levy, assess and collect an additional operation and maintenance tax in an amount up to $0.30 per $100.00 of assessed valuation for all real and personal property in the District (hereinafter referred to as the "OlM Tax") to provide for amounts which become attributable to the operation and maintenance expenses of the District in the future, all of which are expected to be approved pursuant to the Act; and 4 PHX 32753240lv4 8/27/2007 WHEREAS, it is anticipated that with respect to the $99,000,000 of general obligation bonding capacity, $33,000,000 shall be used for Developer GO Bonds (as defined herein) and the remainder for Town and District purposes, subject to the terms and conditions specified herein; and WHEREAS, the use of the proceeds of the sale of the Developer Bonds and amounts which will be collected with respect to the O/M Tax in the future is a subject of this Agreement; and WHEREAS, pursuant to the Act, the District enter into this Agreement with Saguaro Reserve, Empire Land and KB Home Tucson with respect to the advance of moneys for public infrastructure purposes by Saguaro Reserve and the repayment by the District of such advances and to obtain credit enhancement for, and process disbursement and investment of disbursements from the proceeds derived from the sale of the Developer Bonds; and WHEREAS, pursuant to the Act and Title 11, Chapter 7, Article 3, Arizona Revised Statutes, as amended, the District and the Municipality entered into the specified sections of this Agreement as an "intergovernmental agreement" with one another for joint or cooper- ative action for services and to jointly exercise any powers common to them and for the purposes of the planning, design, inspection, owner- ship, control, maintenance, operation or repair of "public infrastruc- ture," including particularly to provide for the timely acceptance by the Municipality of the public infrastructure constructed for the benefit of, or acquired by, the District; 5 PHX 327532401 v4 8/27/2007 NOW, THEREFORE, in the joint and mutual exercise of their powers, in consideration of the above premises and of the mutual cove- nants herein contained and for other valuable consideration, and sub- ject to the conditions set forth herein, the parties hereto agree that: ARTICLE I DEFINED TERMS; MISCELLANEOUS MATTERS RELATING TO USE THEREOF Section 1. 1. (a) For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the terms defined in this Section have the meanings assigned to them in this Section and include, as appropriate, the plural as well as the singular: "Acquisition -Tnfrastructure" means that portion of the Infrastructure other than that which is the subject of a request of Saguaro Reserve and approval of the District Manager described in Section 2.1. "Acquisition Project" means each project which is a part of the Acquisition Infrastructure on a project-by-project basis. "Acquisition Project Construction Contract" means a con- struction contract for an Acquisition Project. "Act" means Title 48, Chapter 4, Article 6, Arizona Revised Statutes, as amended. "Agreement" means this District Development, Financing Participation and Intergovernmental Agreement (Saguaro Springs Com- 6 PHX 327532401V4 8/27/2007 munity Facilities District) , dated as of 1 2007, by and among the Municipality, the District, Saguaro Reserve, KB Home Tucson and Empire Land, as amended from time to. time. "Assessment Bonds" means special assessment lien bonds payable from the special assessment described in Section 6.3 (referred to as originally levied and as thereafter may be reallocated). "Certificate of the Engineers" means a certificate of the Saguaro Reserve Engineer and the District Engineer in substantially the form of Exhibit "C" hereto. "Complete" means, with respect to each Segment, that the items listed in Section 4.2(a) through (f) have been provided as set forth in Section 4.2. "Construction Contract" means a construction contract for a Project. "Conveyance" means a conveyance for a Segment in sub3tan- tially the form of Exhibit "D" hereto. "Court" means Pima County Superior Court. "Cure Period" has the meaning provided thereto in Section 10. 20 (b) . "Deposit Amount" means the dollar amount equal to twice the maximum annual debt service for a series of Developer GO Bonds, for any Fiscal Year (including the amount necessary for any mandatory redemption of related term Developer GO Bonds) for a series of the Developer GO Bonds. "Deposito-r.y Agreement" means a Depository Agreement by and between the indenture trustee appointed with respect to a series of 7 PHX 32753240lv4 8/27/2007 the Developer GO Bonds, in its separate capacity as depository, and the District, which the District and Saguaro Reserve have agreed to execute and deliver with respect to such series of the Developer GO Bonds if a Payment Agreement with respect to such series of the Developer Bonds has been executed and delivered. "Developer Bonds" means the bonds of the District authorized to be sold and issued by the District for the benefit of the Developer as described in this Agreement, which bonds consist of the Developer GO Bonds and the Assessment Bonds. "Developer GO Bonds" means Developer Bonds issued as GO Bonds. "Disclosure Statement" means the disclosure statement sub- stantially in the form of Exhibit "E" hereto. "District" means Saguaro Springs Community Facilities Dis- trict, a community facilities district formed by the Municipality, and organized and existing, pursuant to the laws of the State. "District Board" means the district board of the District. "District Budget" means the budget of the District required for each Fiscal Year by the Act. "District Engineer" means the Engineer for the Munici- pality. "District Expenses" means the reasonable expenses and costs of the operation and administration of the District including the rea- sonable expenses and costs incurred by the Municipality in connection with the formation of the District; its operations; its relationship with the Municipality; its issuance of the Developer Bonds or any 8 PHX 327532401 v4 8/27/2007 similar matters and reasonable fees and related actual costs and expenses of staff of the Municipality, financial advisors, engineers, appraisers, attorneys and other consultants and including any overhead incurred by the Municipality with respect thereto. "District Indemnified Party" means the Municipality and each legislator, director, trustee, member, officer, official or employee thereof or of the District. "Empire Land" means Empire Land, LLC, a limited liability company organized and existing pursuant to the laws of the State of California. "Engineers" means, collectively, the Saguaro Reserve Engineer and the District Engineer; provided, however, that neither may be changed upon less than ten (10) days' prior written notice and, in the case of the Saguaro Reserve Engineer, without compliance with the other provisions hereof with respect to such change. "Fiscal Year" means the twelve (12) month period beginning on July 1 of any year and ending on June 30 of the following year. "Force Majeure" means any condition or event not reasonably within the control of a party obligated to perform hereunder, includ- ing, without limitation, "acts of God"; strikes, lock-outs, or other disturbances of empioyer/employee relations; acts of public enemies; orders or restraints of any kind of the government of the United States or any state thereof or any of their departments, agencies, or officials (including, without limitation, moratoria of any type and duration), or of any civil or military authority; insurrection; civil disturbances; riots; epidemics; landslides; lightning; earthquakes; 9 PHX 32753240lv4 8/27/2007 subsidence; fires; hurricanes; storms; droughts; floods; arrests; restraints of government and of people; explosion; unavailability of goods and/or materials; and partial or entire failure of utilities. Failure to settle strikes, lock-outs and other disturbances of employer/employee relations or to settle legal or administrative proceedings by acceding to the demands of the opposing party or parties, in either case when such course is in the judgment of the party hereto unfavorable to such party, shall not constitute failure to use its best efforts to remedy such a condition or event. "GO Bonds" means general obligation bonds of the District to provide moneys for certain "public infrastructure purposes" (as such term is defined in the Act) described in the General Plan of the District heretofore approved by the Municipality and the District and in this Agreement and including the levy, assessment and collection of a debt service tax against all real and personal property in the District, unlimited as to rate or amount therefore. "Indemnified Party" means the Municipality and the District and each legislator, director, trustee, partner, member, officer, official, independent contractor or employee thereof and each person, if any, who controls the Municipality and/or the District within the meaning of the Securities Act. "Infrastructure" means, collectively, that public infra- structure (as such term is defined in the Act) that is either (i) set forth in the Land Development Agreement and the zoning for the Property or (ii) that portion of the Twin Peaks Road adjacent to the Property. 10 PHX 32753240lv4 8/27/2007 "Intergovernmental Agreement Act" means Title 11, Chapter 7, Article 3, Arizona Revised Statutes, as amended. "Initial Expenses" means The District Expenses prior to receipt of collections of the first levy of the O/M Tax. "Initiation Notice" has the meaning provided in Section 10.20(d). "KB Home Tucson" means KB HOME TUCSON, Inc. an Arizona corporation organized and existing pursuant to the laws of the State of Arizona. "Land Development Agreement" means the Amended and Restated Development Agreement, by and between the Municipality and Saguaro Reserve (as successor to Best Associates II, LLC), recorded April 12, 2004, in Docket No. 12278, official records of Pima County, Arizona, as amended by the First Amendment to Amended and Restated Development Agreement, recorded November 15, 2005, in Docket No. _r official records of Pima County, Arizona, and as further amended from time to time. "Municipality" means the Town of Marana, Arizona, a munici- pality incorporated and existing pursuant to the laws of the State. "01M Expenses" means the reasonable expenses and actual costs of the operation and maintenance of the Projects (including after acceptance by the Municipality pursuant to Section 7.1, but specifically excluding the operation and maintenance costs associated with Twin Peaks Road) and for accumulating a Replacement Reserve Amount with respect to the Projects including any overhead incurred by the Municipality with respect thereto. PHX 32753240lv4 8/27/2007 "01M Tax" means an operation and maintenance tax in the amount up to $0.30 per $100.00 of assessed valuation for all real and personal property in the District. "Panel" has the meaning provided in Section 10.20(d). "Payment Agreement" means a Payment Agreement by and among the District, Saguaro Reserve, KB Home Tucson and Empire Land to be executed and delivered with respect to a series of the Developer Bonds unless determined by the District Board, in writing and delivered to Saguaro Reserve, prior to the issuance of any series of Developer GO Bonds, not to be necessary at the time of issuance of such series of the Developer GO Bonds, such determination herein being deemed to have been made by the District Board with respect to any such series of the Developer GO Bonds that is issued without the simultaneous execution and delivery of a Payment Agreement. "Plans and Specifications" means the plans and specifica- tions for a Project which shall be prepared and reviewed in accordance with the requirements for plans and specifications for construction projects of the Municipality similar to the Project or the Acquisition Project, as applicable. "Process" has the meaning provided in Section 10.20(d). "Project" means each discrete item of the Infrastructure that is subject to a separate procurement process pursuant to the terms of this Agreement, and, if constructed in phases, which is a "Segment" (as defined herein) when Complete. "Property" means the real property described in Exhibit "A" to this Agreement. 12 PHX 327532401 V4 8/27/2007 "Replacement Reserve Amount" means an amount calculated using reasonable accounting practices based on the useful life of the various assets composing the Projects, as established by the Internal Revenue Code of 1986, as amended. "Report" means the study of the feasibility and benefits required by the Act for the applicable Project or Acquisition Project. "Saguaro Reserve Engineer- means any firm of professional engineers hired by Saguaro Reserve after approval thereof by the District Manager to perform the services required therefrom for the purposes hereof. "Saguaro Reserve, LLC" means Saguaro Reserve, LLC, a limited liability company organized and exi-sting pursuant to the laws of the State of Delaware. "Securities Act" means the Securities Act of 1933, as amended. "Segment" means a Complete, discrete portion of an Acqui- sition Project. "Segment Price" means an amount equal to the sum of the amounts paid by Saguaro Reserve for (1) design of the Segment (in- cluding the costs of the review of such design by the District Engi- neer), (2) construction of the Segment pursuant to the Acquisition Project Construction Contract for such Segment (such amount to be equal to the contract amount plus any increases to such contract amount approved as described in Section 3.5 less any change orders decreasing the contract amount), (3) inspection and supervision of performance under such Acquisition Project Construction Contract and 13 PHX 32753240lv4 8/27/2007 (4) an interest in land not actually or beneficially owned by Saguaro Reserve but necessary for the Segment, as described in Section 2.1.1, and (5) other miscellaneous costs for such Segment attributable to construction of the Segment approved by the Engineers as certified in the Certificate of the Engineers for that Segment, including, without limitation, any temporary facilities of the Project. "S&P" shall mean Standard & Poor's Ratings Group, a Divi- sion of the McGraw Hill Companies, or any successor thereto. "Standby Contribution Agreement" means a Standby Contribu- tion Agreement by and among the indenture trustee appointed with respect to a series of the Developer GO Bonds, the District, Saguaro Reserve, KB Home Tucson and Empire Land which is to be executed and delivered for a series of the Developer GO Bonds unless determined by the District Board, in writing and delivered to Saguaro Reserve, prior to the issuance of any series of Developer GO Bonds, not to be necessary, such determination herein being deemed to have been made by the District Board with respect to such series of the Developer GO Bonds that are thereafter issued without the simultaneous execution and delivery of a Standby Contribution Agreement. "State" means the State of Arizona. "Total Debt Service" means, collectively, amounts for debt service for the next succeeding tax year with respect to the Developer Bonds and for payment of the amounts described in Section 9.1 for such year. "Town Council" means the governing body of the Munici- pality. 14 PHX 327532401 v4 8/27/2007 (b) All references in this Agreement to designated "Exhibits," "Articles," "Sections" and other subdivisions are to be deemed to refer to the designated Exhibits, Articles, Sections and other subdivisions of this Agreement as originally executed. (c) The words "herein," "hereof" and "hereunder" and other words Of similar import refer to this Agreement as a whole and not to any particular Exhibit, Article, Section or other subdivision. ARTICLE II CONSTRUCTION OF PROJECTS BY THE DISTRICT; ACQUISITION OF PLANS AND SPECIFICATIONS Section 2.1. Upon a written request of Saguaro Reserve and after approval by the District Manager prior to the construction procurement therefor, the District may and, if the Project which is the subject of such request is not on real property in which Saguaro Reserve, KB Home Tucson or Empire Land has an interest, shall, at the sole cost and expense of Saguaro Reserve cause any portion of the Infrastructure to be constructed pursuant to the Plans and Specifications in a fashion which, in the sole discretion of the District Board, allows for development of the Property to proceed in accordance with the terms of the Land Development Agreement. Saguaro Reserve, KB Home Tucson and Empire Land shall be liable, jointly and severally, for the cost and expense of such portion of the Infrastructure pursuant to a separate completion guaranty and indemnity in form acceptable to the District Manager provided with the request described in the first sentence of this Section. (Underlying 15 PHX 327532401 v4 8/27/2007 ownership of real property shall be determined in the final plat or final development plan process of the Municipality.) Section 2.2. (a) The construction of the Infrastructure which is the subject of this Article shall be procured, and such Infrastructure shall be constructed, in accordance with the requirements for publicly procuring and constructing projects of the Municipality similar to the Projects. (b) Such Infrastructure (or any Project which is a part thereof) shall be procured in one or more parts by and in the name of the District, and Construction Contracts shall be entered into with the contractors selected in accordance with the requirements for awarding contracts for projects of the Municipality similar to the Construction Contracts as specified in Article 3-4 of the Marana Code and any procurement guidelines promulgated in connection therewith. Section 2. 3. Saguaro Reserve, KB Home Tucson and Empire Land (or any entity related to either of them) shall not be compensated more than once by the Municipality or the District for any costs of any Project. Section 2.4. Construction of any Project which is the sub- ject of this Article shall be financed (a) at any time before the sale and delivery of the Developer Bonds (or after there are no available, unrestricted proceeds of the sale of the Developer Bonds remaining) only pursuant to Section 5.1(a) and (b) at any time after the sale and delivery of the Developer Bonds (and while there are remaining available, unrestricted proceeds of the sale of the Developer Bonds) only pursuant to Section 5.1(b). 16 PHX 327532401 v4 8/27/2007 Section 2.5. (a) Unless the financial assurances described in the next subsection are provided, any advertisement for bids for construction of any Project which is the subject of this Article pursuant to Section 2.1 shall include th e following language: "THE INFRASTRUCTURE WHICH IS THE SUBJECT OF THIS BID IS THE SUBJECT OF A DISTRICT DEVELOPMENT, FINANCIAL PARTICIPATION AND INTERGOVERNMENTAL AGREEMENT AMONG OWNER, THE TOWN OF MARANA, ARIZONA AND SAGUARO RESERVE, LLC. THE SUCCESSFUL CONTRACTOR WILL NOT HAVE RECOURSE, DIRECTLY OR INDIRECTLY, TO SUCH TOWN OR OWNER FOR ANY COSTS UNDER ANY CONSTRUCTION CONTRACT OR ANY LIABILITY, CLAIM OR EXPENSE ARISING THEREFROM. SAGUARO RESERVE, LLC SHALL HAVE SOLE LIABILITY THEREFOR." (The District is "OWNER" for purposes of the foregoing.) (b) Each Construction Contract for such a Project shall provide that the respective contractors shall not have recourse, directly or indirectly, to the Municipality or the District for the payment of any costs pursuant to such Construction Contract or any liability, claim or expense arising therefrom and that Saguaro Reserve shall have sole liability therefor. In lieu of the foregoing, Saguaro Reserve may post financial assurances in a form and an amount determined acceptable in the sole and absolute discretion of the District Manager to provide for amounts due with respect to any of such Construction Contracts. Section 2.6. Plans and Specifications for any such Proj- ects shall be prepared by the Saguaro Reserve Engineer and shall be acquired by the District pursuant to Section 5.2(b) simultaneously with the financing of the construction of the related Project pursuant 17 PHX 32753240lv4 8/27/2007 to Section 3.1(b). The District shall not be liable for any payment or repayment to Saguaro Reserve with respect to such Plans and Speci- fications except as provided by this Agreement. ARTICLE III CONSTRUCTION OF ACQUISITION PROJECTS BY THE OWNER; CERTAIN MATTERS RELATED TO PLANS AND SPECIFICATIONS Section 3.1. Subject to the terms of this Agreement including the obligation under the circumstances described herein to pay the Segment Price for a Segment as hereinafter provided, Saguaro Reserve shall cause the remainder of the Infrastructure (i.e., the Acquisition Infrastructure) to be constructed at the location denoted on, and in accordance with, the Plans and Specifications. The construction of the Infrastructure shall initially be at the sole cost and expense of Saguaro Reserve. (Underlying ownership of real property in and on which the Acquisition Infrastructure is to be built shall be determined in the final plat or final development plan process of the Municipality.) Section 3.2. (a) The construction of the Acquisition Infrastructure and the preparation of the Plans and Specifications shall be procured pursuant to the prOV131ons of Title 34, Chapter 2, Article 1, Arizona Revised Statutes, as amended, and in accordance with the requirements for construction projects and plans and specifi- cations, respectively, of the Municipality similar to the Acquisition Projects and the Plans and Specifications as specified in Article 3-4 of the Marana Code and any procurement guidelines promulgated in con- 18 PHX 327532401 v4 8/27/2007 nection therewith. Acquisition Project Construction Contracts shall be entered into with the contractors selected in accordance with the requirements for awarding contracts for projects of the Municipality similar to the Acquisition Project Construction Contracts as specified by such Code and guidelines, and contracts for preparation of the Plans and Specifications shall be entered into with the contractor selected in accordance with the requirements for awarding contracts for preparing plans and specifications of the Municipality similar to the Plans and Specifications as specified by such Code and guidelines. (Compliance with such requirements with respect to the Acquisition Projects shall be evidenced by a Certificate of the Engineers.) (b) As between Saguaro Reserve and the District, Saguaro Reserve shall bear all risks, liabilities, obligations and responsibilities under each Acquisition Project Construction Contract and all risk of loss of or damage to any Acquisition Project (or any part thereof) occurring prior to the time of acquisition of such Acquisition Project (or part thereof) pursuant to Article IV. (c) The Municipality and the District shall be named as an additional named insured on any insurance policies required under a bid for an Acquisition Project and as a third party beneficiary with respect to all warranties, guarantees and bonds, if any, with respect thereto. (d) An indication of final payment and contract closeout shall be provided to the District Manager before any acqui- sition pursuant to Article IV. If any liens are placed on any Segment of an Acquisition Project which is the subject of an Acquisition 19 PHX 32753240lv4 8/27/2007 Project Construction Contract or if litigation ensues between Saguaro Reserve and any contractor with respect to an Acquisition Project Construction Contract, the District shall not acquire such Segment until such liens are removed or such litigation is resolved or bonded. Section 3.3. (a) Subsequent to the execution and delivery of this Agreement, any advertisement for bids for construction of any Acquisition Project or provision of any Plans and Specifications to be acquired shall clearly indicate that Saguaro Reserve will be the "owner" for purposes of the Acquisition Project Construction Contract or contract for such Plans and Specifications and shall include the following language: "THE WORK WHICH IS THE SUBJECT OF THE BID IS THE SUBJECT OF A DISTRICT DEVELOPMENT, FINANCING PARTICIPATION AND INTER- GOVERNMENTAL AGREEMENT AMONG OWNER, THE TOWN OF MARANA, ARIZONA, AND SAGUARO RESERVE COMMUNITY FACILITIES DISTRICT PURSUANT TO WHICH SUCH WORK MAY BE ACQUIRED BY SUCH COMMUNITY FACILITIES DISTRICT. THE SUC- CESSFUL CONTRACTOR WILL NOT HAVE RECOURSE, DIRECTLY OR INDIRECTLY, TO SUCH TOWN OR COMMUNITY FACILITIES DISTRICT FOR ANY COSTS UNDER ANY CONTRACT OR ANY LIABILITY, CLAIM OR EXPENSE ARISING THEREFROM. OWNER SHALL HAVE SOLE LIABILITY THEREFOR." (Saguaro Reserve is "OWNER" for purposes of the foregoing.) (b) Each Acquisition Project Construction Contract or contract for such Plans and Specifications shall provide that the respective contractors shall not have recourse, directly or indi- rectly, to the Municipality or the District for the payment of any costs pursuant to such Acquisition Project Construction Contract or contract for such Plans and Specifications or any liability, claim or 20 PHX 32753240lv4 8/27/2007 expense arising therefrom and that Saguaro Reserve shall have sole liability therefor. In lieu of the foregoing, Saguaro Reserve may post financial assurances in a form and an amount determined acceptable in the sole and absolute discretion of the District Manager to provide for amounts due with respect to any of such Construction Contracts. Section 3.4. Saguaro Reserve shall provide for inspection of work performed under any Acquisition Project Construction Contract by the Engineers. Section 3. 5. Any change order to any Acquisition Project Construction Contract shall be subject to approval by the Engineers (which approval shall not be unreasonably withheld or delayed) and shall be certified to in the applicable Certificate of the Engineers; provided, however, that any change order expected to increase the amount of an Acquisition Project Construction Contract shall be the subject of the same approval requirements that a change order to increase the cost of a construction contract of the Municipality would be subject unless modified by action of the District Board and, spec- ifically, the approval of the District Manager. Section 3. 6. Notwithstanding anything to the contrary in this Agreement, this Agreement shall not and does not obligate Saguaro Reserve, Empire Land, or KB Home Tucson to construrt q n,7 Infrastructure or to develop the Property in any particular manner or at all. This Agreement does not modify in any way any rights, duties or obligations set forth in the Land Development Agreement or in the zoning for the Property. 21 PHX 32753240lv4 8/27/2007 ARTICLE IV ACQUISITION OF ACQUISITION PROJECTS FROM THE OWNER Section 4. 1. (a) Subject to the other terms of this Agreement, Saguaro Reserve shall sell to the District, and the District shall acquire from Saguaro Reserve, each Segment for the applicable Segment Price. (b) Acquisition of a Segment shall be financed (1) at any time before the sale and delivery of the applicable Developer Bonds (or after there are no available, unrestricted proceeds of the sale of the Developer Bonds remaining) only pursuant to Section 5.2(a) hereof and (2) at any time after the sale and delivery of the Developer Bonds (and while there are available, unrestricted remaining proceeds of the sale of the Developer Bonds) only pursuant to Section 5.2(b) hereof. (c) The District shall not be liable for any payment or repayment to Saguaro Reserve with respect to the Acquisition Infrastructure except as provided by this Agreement and applicable law. Section 4. 2. The District shall acquire from' Saguaro Reserve and, to the extent it has available funds, pay the Segment Price for each Segment as provided in Section 4.1, but no more than thirty (30) days after receipt by the District manager of the below stated items (a through f) relating to each Segment, and Saguaro Reserve shall accept the Segment Price for and sell to the District, each Segment as provided in Section 4.1 after the approval of the Report and within thirty (30) days after receipt by the District 22 PHX 32753240lv4 8/27/2007 Manager of the following with respect to such Segment, in form and substance reasonably satisfactory to the District Manager: (a) the Certificate of the Engineers; (b) the Conveyance; (c) evidence that public access to the Segment or the Acquisition Project, as applicable, has been or eventually will be provided to the Municipality; (d) the assignment of all contractors' and material- men's warranties and guarantees and to the extent assignable, the assignment of payment and performance bonds; (e) an acceptance letter issued by the Municipality and by its terms subject specifically to recordation of the Conveyance which is the subject of such letter and (f) such other documents, instruments, approvals or opinions as may reasonably be requested by the District Manager including, with respect to any real property re- lated to the Acquisition Project, title reports, insurance and consultant reports that provide evidence, satisfactory to the District Manager, that such real property does not contain environmental contaminants which make such real property unsuitable for its intended use or, to the extent such contaminants are present, a plan satisfactory to the District Manager which sets forth the process by which such real property will be made suitable for its intended use 23 PHX 327532401 v4 8/27/2007 and the sources of funds necessary to accomplish such purpose. ARTICLE V FINANCING OF COSTS OF PROJECTS AND PLANS AND SPECIFICATIONS Section 5.1 (a) (1) To provide for amounts due pursuant to any Construction Contract (including incidental costs relating thereto) before the sale and delivery of any of the Developer Bonds and after there are no remaining, available, unrestricted proceeds of the sale of the Developer Bonds, such amounts shall be advanced by Saguaro Reserve and the obligation to advance such amounts shall be the obligation of Saguaro Reserve pursuant to the terms of this Agreement. Each such advance shall be evidenced by a written acknowledgement of the District Manager included as part of the written approval of the Engineers with each pay request of the contractor for each Construction Contract. (2) As soon as possible after the sale and delivery of any of the Developer Bonds, the total amounts so advanced by Saguaro Reserve for such purpose prior to the sale and delivery of the Developer Bonds shall be immediately paid to Saguaro Reserve the available, unrestricted proceeds of the sale of the Developer Bonds, but only to the extent of the remaining amounts thereof. Neither the District nor the Municipality shall be liable to Saguaro Reserve (or any contractor or assigns under any Construction Contract) for payment of any such amount except to the extent available, unrestricted 24 PHX 327532401 v4 8/27/2007 proceeds from the sale of the Developer Bonds are available for such purpose, and no representation or warranty is given that the Developer Bonds can be sold or that sufficient proceeds from the sale of the Developer Bonds shall be available to pay such amounts. (3) Until the sale and delivery of future series of the Developer Bonds if the District does not have any remaining, available, unrestricted proceeds from the sale of the Developer Bonds, the District shall not have any obligation to repay Saguaro Reserve for any advance made by Saguaro Reserve to pay such amounts. (b) (1) Any amounts due pursuant to any Construc- tion Contract (including incidental costs relating thereto) after the sale and delivery of any of the Developer Bonds (and while there are remaining, available, unrestricted proceeds of the sale of the Developer Bonds) shall be provided for by the payment of such amounts from, and only from, the available, unrestricted proceeds from the sale of current and future series of the Developer Bonds to the extent only of the remaining amounts thereof. (2) In the event there are no available unrestricted proceeds from the sale of current or prior series of Developer Bonds, then until the sale and delivery of future series of the Developer Bonds, the District shall not have any obligation to pay such amounts. Furthermore, in such an event, neither the District nor the Municipality shall be liable to Saguaro Reserve (or any contractor or assigns under any Construction Contract) for payment of any such amount except to the extent available, unrestricted proceeds from the 25 PHX 327532401 v4 8/27/2007 sale of future series of the Developer Bonds are available for such purpose, and no representation or warranty is given that the Developer Bonds can be sold or that sufficient, available, unrestricted proceeds from the sale of such future series of the Developer Bonds shall be available to pay such amounts. Section 5.2. (a) (1) To provide for any acquisition of a Segment occurring before the sale and delivery of the *Developer Bonds and during such time as there are no remaining, available, unrestricted proceeds from the sale of current or prior series of the Developer Bonds, the Segment Price of that Segment shall be advanced by Saguaro Reserve pursuant to the terms of this Agreement and the Conveyance for that Segment. (2) As soon as possible after the sale and delivery of each series of the Developer Bonds, the amount advanced by Saguaro Reserve for the Segment Price of a Segment prior to the sale and delivery of such Developer Bonds shall, subject to the requirements of Section 4.2, be paid to Saguaro Reserve (without interest for the period during which it was unpaid) from, and only from, the available, unrestricted proceeds of the sale of Developer Bonds, but only to the extent of the remaining amounts thereof. Neither the District nor the Municipality shall be liable to Saguaro Reserve (or any contractor or assigns under any Acquisition Project Construction Contract) for payment of any Segment Price except to the extent available, unrestricted proceeds from the sale of the Developer Bonds are available for such purpose, and no representation or warranty is given that the Developer Bonds can be sold or that 26 PHX 32753240lv4 8/27/2007 sufficient available, unrestricted proceeds from the sale of the Developer Bonds shall be available to pay any specific Segment Price. (3) Until the sale and delivery of the Developer Bonds and during any time when there are no available, unrestricted remaining proceeds of the sale of the Developer Bonds, the District shall not have any obligation to repay Saguaro Reserve for any advance made by Saguaro Reserve to pay a Segment Price. (b) (1) Any acquisition of a Segment or of Plans and Specifications for a Project occurring after the sale and delivery of the Developer Bonds (and while there are remaining, available, unrestricted proceeds from the sale of the Developer Bonds) shall, subject to the requirements of Section 4.2, be provided for by the payment of the Segment Price for such Segment or the costs of such Plans and Specifications, whichever is applicable, as determined by the District Engineer and the District Manager based on actual amounts paid by Saguaro Reserve to the Saguaro Reserve Engineer therefor from, and only from, the available, unrestricted proceeds from the sale of the Developer Bonds, but only to the extent of the remaining amounts thereof. The District shall pay the costs of such Plans and Specifications to Saguaro Reserve as provided in Section 2.6 after approval of the Report and within thirty (30) days after receipt by the District Manager of evidence of exclusive ownership of the architectural materials (including memoranda, notes and preliminary and final drawings) and the related intellectual property rights (including copyright, if any) related to such Plans and Specifications, in all media, including electronic, for the limited 27 PHX 327532401 V4 8/27/2007 purpose of operating and maintaining the Segment (s) that are the subject of the Plans and Specifications, and that the District shall be held harmless and be free to use such Plans and Specifications for the limited purpose of such operation and maintenance. (2) Until the sale and delivery of a series of Developer Bonds, the District shall not have any obligation to pay such Segment Price or such costs of such Plans and Specifications. Neither the District nor the Municipality shall be liable to Saguaro Reserve (or any contractor or assigns under any Acquisition Project Construction Contract) for payment of any Segment Price or for the costs of such Plans and Specifications except to the extent available, unrestricted proceeds from the sale of the Developer Bonds are available for such purpose, and no representation or warranty is given that the Developer Bonds can be sold or that sufficient, available unrestricted proceeds from the sale of the Developer Bonds shall be available to pay such Segment Price or such costs of such Plans and Specifications. ARTICLE VI MATTERS RELATING TO THE DEVELOPER BONDS AND OTHER OBLIGATIONS OF THE DISTRICT; PROVISIONS RELATED TO GENERAL OBLIGATION BONDS AND SPECIAL ASSESSMENT BONDS Section 6.1. (a) Upon dates established by the District Manager in his sole and absolute discretion, but at the request of Saguaro Reserve, the District Board shall, from time to time, take all such reasonable action necessary for the District to issue and sell, 28 PHX 32753240lv4 8/27/2007 pursuant to the provisions of the Act, an applicable amount of the Developer Bonds in an amount sufficient to repay all then outstanding and pending advances for, or to pay directly from the available, unrestricted proceeds thereof, the total of all amounts due for the purposes of any Construction Contract for the Infrastructure and the Segment Prices for the Acquisition Infrastructure and costs of the Plans and Specifications for the Infrastructure to be acquired, established or reasonably expected to be established pursuant hereto plus all relevant issuance costs related thereto. (To the extent the District is not otherwise prohibited from agreeing pursuant to appli- cable law, except at the request of, or with the written consent of, Saguaro Reserve (1) the District shall not undertake the issuance of any general obligation bonds until the earlier of (i) twenty (20) years from the date hereof and (ii) the issuance of all of the Developer GO Bonds by the District and, (2) the District shall not undertake the issuance of special assessment bonds until less than 15% of the assessment to be levied to secure the special assessment bonds will be levied on property owned by the Developer, in each case, to finance Costs of any public infrastructure other than the Infrastruc- ture (for which the District may at any time in its sole and absolute discretion undertake such financing.)) (b) If the Developer Bonds are not issued or if the available, unrestricted proceeds of the sale of the Developer Bonds are insufficient to pay all of the amounts due described in Section 5.1(b) or all of the Segment Prices for the Acquisition Infrastructure and costs of the Plans and Specifications for the Infrastructure to be 29 PHX 327532401 v4 8/27/2007 acquired, then there shall be no recourse against the District or the Municipality for, and neither the District nor the Municipality shall have liability with respect to, such amounts so due or the Segment Prices for the Acquisition Infrastructure, except from the available, unrestricted proceeds from the sale of the Developer Bonds, if any and as applicable. Section 6.2 (a) The District shall, subject to the other conditions of this Agreement, issue, in one or more series in princi- pal amounts to be determined by the District Board, the Developer Bonds at the sole discretion of the District Board. The District shall not issue any series of the Developer GO Bonds unless the corresponding series of the Developer GO Bonds shall receive one of the four highest investment grade ratings by a nationally recognized bond rating agency or shall be sold in other than a "public sale" (as such term is used in the Act) and with restrictions on subsequent transfer thereof under such terms as the District Board shall, in their sole discretion, approve. (b) The total aggregate principal amount of all of the series of the Developer GO Bonds shall not exceed $33,000,000, leaving $66,000,000 aggregate principal amount of GO Bonds approved at the election described in the recitals to this Agreement which are not controlled by the terms of this Agreement but subject to the provisions of Section 6.1(a) hereof. Notwithstanding the foregoing or anything in this Agreement to the contrary, if the Town and Saguaro Reserve amend the Land Development Agreement to specifically provide for the District to fund a portion of the costs to design, construct, 30 PHX 32753240lv4 8/27/2007 or acquire all or part of Twin Peaks Road from the western boundary of the Property to the intersection of Twin Peaks Road and Silverbell Road (including potentially the costs to design and install a traffic control signal at the Twin Peaks/Saguaro Peaks Boulevard inter- section), then the District, the Town, and Saguaro Springs agree that: (i) the costs of such design, construction or acquisition shall not be funded through Developer Bonds; (ii) if, and only if, Saguaro Reserve's express agreement is contained in the amendment to the Land Development Agreement, then a portion of the costs of such construction or acquisition may be funded by GO Bonds that are not Developer GO Bonds during the twenty-year period referenced in Section 6. 1 (a) (1) W ; and (iii) the costs to design and construct Twin Peaks Road adjacent to the Property shall be included in the Go Bonds issued to fund a portion of the design, construction, and/or acquisition costs of Twin Peaks Road not adjacent to the Property. (C) Unless the provisions of subsection (d) of this section are satisfied, a series of the Developer GO Bonds shall only be issued if the debt service therefor can be amortized with substantially equal amounts of annual debt service from amounts generated by a tax rate of not to exceed $2.50 per one hundred dollars of secondary assessed valuation of property within the boundaries of the District as indicated on the tax roll for the current tax year. For purposes of the foregoing, a delinquency factor for tax collections equal to the greater of five percent (5%) and the historic, average, annual, percentage delinquency factor for the District as of such Fiscal Year shall be assumed; all property in the 31 PHX 327532401 v4 8/27/2007 District owned by Saguaro Reserve, KB Home Tucson and Empire Land or any entity owned or controlled (as such term is used in the Securities Act) by, or which owns or controls (as such term is used in the Securities Act), Saguaro Reserve, KB Home Tucson or Empire Land shall be assigned the last value such property had when categorized as "vacant" for purposes of secondary assessed valuation and the debt service for any outstanding series of the Developer GO Bonds theretofore issued shall be taken into account in determining whether such tax rate will produce adequate debt service tax collections; provided, however, that the first series of the Developer GO Bonds shall be issued as soon as practicable to accomplish the goal of having the debt service tax costs therefor appear on the first tax bill applicable to any single family residential dwelling unit to be located within the boundaries of the District to be owned by other than Saguaro Reserve, KB Home Tucson or Empire Land or any entity owned or controlled (as such term is used in the Securities Act) by Saguaro Reserve, KB Home Tucson or Empire Land or any homebuilder to whom Saguaro Reserve, KB Home Tucson or Empire Land or any entity owned or controlled (as such term is used in the Securities Act) by, or which owns or controls (as such term is used in the Securities Act), Saguaro Reserve, KB Home Tucson or Empire Land sells property within the boundaries of the District. (d) (1) If necessary in the sole discretion of the District Board, the "sale proceeds" from the sale of each series of the Developer GO Bonds shall include an amount sufficient to fund a reserve fund, which shall be a reserve to secure payment of debt 32 PHX 327532401A 8/27/2007 service on that series of the Developer GO Bonds, in an amount equal to the maximum amount permitted by the Internal Revenue Code of 1986, as amended, and the Treasury Regulations applicable thereto. (2) If necessary, in the sole discretion of the District Board to regulate the tax rate to be levied to pay debt serv- ice on each series of the Developer GO Bonds, in consideration of the obligations of the District as of the date of delivery of the Developer GO Bonds and as a condition to the issuance of the corresponding series of the Developer GO Bonds, a Standby Contribution Agreement shall be executed and delivered which provides, among the other matters provided for in this Section, that on the date of initial issuance and delivery of the corresponding series of the Developer GO Bonds and in each Fiscal Year thereafter, Saguaro Reserve, KB Home Tucson and Empire Land shall be liable and obligated, jointly and severally, to pay to the District, or to provide adequate assurances in the sole and absolute discretion of the District Board which provide, an amount necessary to maintain the tax rate with respect to the Developer GO Bonds at no more than $2.50 per $100.00 of secondary assessed valuation for Total Debt Service, given the tax base of the District for such tax year and the debt service requirements of the Developer GO Bonds for such tax year assuming a delinquency factor of five percent (5%) and after giving credit with respect to any such payment for any balance in the debt service fund for the Developer GO Bonds and (B) a Payment Agreement shall be -6xecuted and delivered pursuant to 'which the amount equal to the Deposit Amount shall be deposited in the name of the District with a 33 PHX 327532401 v4 8/27/2007 depository pursuant to a Depository Agreement in cash or a surety bond, letter of credit or other adequate security instrument accept- able in the sole and absolute discretion of the District Manager in lieu of such cash. Each Standby Contribution Agreement, each Payment Agreement and each Depository Agreement shall have general terms acceptable to the District Board and shall be in a final form accept- able in the sole and absolute discretion of the District Manager. Such agreements shall specifically provide that amounts shall be paya- ble, or provided by such assurances, pursuant to a Standby Contribu- tion Agreement and a Payment Agreement only if the District has for that tax year adopted a resolution authorizing the levy of a tax rate for Total Debt Service of at least $2.50. (3) Each of the Standby Contribution Agreements shall have specific terms which provide the following: (A) Amounts due pursuant to a Standby Con- tribution Agreement shall be reduced by any interest earnings on the amounts held pursuant to the Depository Agreement which shall be paid to the District to provide for such offset. (If not needed for such purpose, such interest earnings shall be paid to Saguaro Reserve, Empire Land or KB Home Tucson, as applicable.) (B) The obligation of Saguaro Reserve, KB Home Tucson and Empire Land with respect to each of the Standby Contribution Agreements shall terminate upon the earlier of (I) payment, or provision for such payment, in full of all of the outstanding Developer GO Bonds, or (II) the first Fiscal Year in which principal of each series of the Developer GO Bonds has started to be 34 PHX 327532401 v4 8/27/2007 amortized for which the District Manager has received evidence satisfactory to the District Manager that, for at least three (3) consecutive Fiscal Years, a tax rate of $2.50 per $100 of secondary assessed valuation of property within the boundaries of the District would have been sufficient to pay maximum annual debt service with respect to the Developer GO Bonds for any subsequent Fiscal Year plus the historical, annual, average of amounts necessary for payment of amounts described in Section 9.1 as of such Fiscal Year. Such evi- dence shall consist of a written projection, prepared by the financial advisor of the District, that is based upon the application of such secondary tax rate in light of the actual secondary assessed valuation of the property within the boundaries of the District for such Fiscal Year, assuming a delinquency factor equal to the greater of five percent (5%) and the historic, average, annual, percentage delinquency factor for the District as of such Fiscal Year and without credit for any fund balances or investment income accruing during such Fiscal Year. (After receipt of proof of satisfaction of such condition, the District Board shall approve in writing by affirmative action such termination.) (4) Each of the Depository Agreements shall specifically provide in addition to the matters provided hereinabove that amounts held by the Depository pursuant to a Depository Agreement shall be applied to supplement ad valorem tax revenues of the District for the payment of Total Debt Service if amounts are not available for such purpose pursuant to the Standby Contribution Agreements. The Payment Agreements shall specifically provide in addition to the 35 PHX 327532401 v4 8/27/2007 matters provided hereinabove that Saguaro Reserve, KB Home Tucson and Empire Land shall be liable and obligated, jointly/ and severally, to deposit additional amounts pursuant to the Payment Agreements so that the amount on deposit or the security instrument in lieu thereof held pursuant to each of the Depository Agreements always equals the corresponding Deposit Amount. Each of the Payment Agreements shall specifically provide that it shall terminate, and each of the Deposi- tory Agreements shall specifically provide that any remaining cash amounts or security instrument in lieu thereof held pursuant thereto shall be paid or released, respectively, to Saguaro Reserve, upon the earlier of (A) payment, or provision of payment, in full of all of the outstanding Developer GO Bonds, or (B) the first Fiscal Year in which principal of that series of the Developer GO Bonds has started to be amortized for which the District Manager has received evidence satisfactory to the District Manager that, for such Fiscal Year, a tax rate of $2.50 per $100 of secondary assessed valuation of property within the boundaries of the District would have been sufficient to pay maximum annual debt service with respect to the Developer GO Bonds for any subsequent Fiscal Year plus the historic, annual, average of amounts necessary for payment of amounts described in Section 9.1 as of such Fiscal Year. Such evidence shall consist of a written projection, prepared by the financial advisor of the District, that is based upon the application of such secondary tax rate in light of the actual secondary assessed valuation of the property within the boundaries of the District for such Fiscal Year, assuming a delinquency factor equal to the greater of five percent (5%) and the 36 PHX 327532401 v4 8/27/2007 historic, average, annual, percentage delinquency factor for the District as of such Fiscal Year and without credit for any fund balances or investment income accruing during such Fiscal Year. (After receipt of proof of satisfaction of such condition, the District Board shall approve in writing by affirmative action such termination and payment or release, as applicable.) Section 6.3. (a) Assessment Bonds shall be special assessment lien bonds payable from amounts collected from, among other sources, the hereinafter described special assessment (referred to as originally levied and as thereafter may be reallocated as described herein as the "Assessments"). (b) The Assessments shall be based on the Financeable Amount indicated in the Report. None of the Acquisition Project Construction Contracts or the Construction Contracts applicable to any Project shall be required to be publicly procured or awarded as a prerequisite to the levying of the Assessments. (c) The Assessments shall be levied pursuant to the procedures prescribed by Sections 48-576 through 48-589, Arizona Revised Statutes as amended, as nearly as practicable or such other procedures as the District provides. (d) In the event of nonpayment of the Assessment, the procedures for collection thereof and sale of the applicable portion of the Property may be established by the District, or the District may adopt the procedures prescribed by Sections 48-601 through 48-607, Arizona Revised Statutes, as amended, as nearly as practicable, except that, under all procedures, neither the District nor the Municipality 37 PHX 327532401 v4 8/27/2007 is required to purchase any of the Property at the sale if there is no other purchaser. (e) To prepay, from property owner payments, in whole or in part the applicable portion of the Assessment, on any interest payment date, the following shall be paid in cash to the District: (A) the interest on such portion to the next date Assessment Bonds may be redeemed plus (B) the unpaid principal amount of such portion rounded up to the next highest multiple of the lowest authorized denomination of the Assessment Bonds plus (C) any premium due on such redemption date with respect to such portion plus (D) any administrative or other fees charged by the District with respect thereto. (f) Saguaro Reserve hereby acknowledges that lenders and other parties involved in financing future improvements on the Property (including mortgages for single family residences) may require that liens associated with the Assessment (or applicable portions thereof) be paid and released, prior to accepting a lien with respect to any such financing. (g) Requirements for Assessment Bonds. (1) Town CFD Policies Apply. Proceeds of the Assessment Bonds may be used for any purpose permitted by the Act. The terms and provisions of the Assessment Bonds and the manner of sale shall be established by the Town CFD Policies (as defined below), except as such Town CFD Policies are modified by or inconsistent with, this Agreement or the District's approval of the Report. 38 PHX 327532401 v4 8/27/2007 (ii) A2praisal; Coverage Ratio. At the time of sale of the Assessment Bonds, an appraisal dated not earlier than six (6) months prior to the date of sale of the Assessment Bonds, in form and substance satisfactory to the District, in its sole and absolute discretion, and prepared by an MAI appraiser (the "Appraisal") must show that the wholesale (bulk) value of each assessed parcel or lot in any assessment area securing the Assessment Bonds (as improved by the public infrastructure described in the relevant Report) less five percent (5%), is worth at least six times (in the case of a public sale of Assessment Bonds) and four times (in the case of a sale of the Assessment Bonds to qualified institutional buyers [as defined in Rule 144A of the Securities Act of 1933, as amended], accredited investors [as defined in Rule 501(a), Regulation A of the Securities and Exchange Commission, as amended]) or sophisticated municipal market participants [as defined by the Municipal Securities Rulemaking Board], as much as the principal amount of the Assessment Bonds allocated to each assessed parcel. (iii) Financial Assurance. At the time of sale of the Assessment Bonds, and to the extent not already provided by the contractors pursuant to the public procurement requirements, Saguaro Reserve shall provide or cause to be provided financial assurances in the form of escrowed cash, bonds, letter of credit or other similar assurances, accessible by the District and in each case in form reasonably acceptable to both the District Manager and Saguaro Reserve, for amounts necessary to pay all 39 PHX 327532401 v4 8/27/2007 costs and expenses associated with providing all the public infrastructure purposes described in the Report as well as any unpaid costs and expenses of any public infrastructure purposes not paid or payable from the proceeds of the sale of the Assessment Bonds because such proceeds are insufficient in amount for such purposes. The foregoing is not intended to limit the right of Saguaro Reserve to reimbursement for any amount advanced in excess of the proceeds from the sale of the Assessment Bonds if the District is able to finance such amount from other or future Assessment Bond proceeds, and the District and the Municipality shall reasonably cooperate with Saguaro Reserve in preserving the right to any such future reimbursement. (iv) Reserve Fund. Unless reduced by the District Board in the Approval, the amount of the Assessment Bonds and the "sale proceeds" thereof shall be sized to include an amount sufficient to fund a reserve to secure payment of debt service on the Assessment Bonds for a period of one (1) year. Payment from such reserve shall not effect a reduction in the amount of the Assessment, and any amount collected with respect to the Assessment thereafter shall be deposited to such reserve to the extent the.Assessment is so paid therefrom. (v) Billings and Collections. Unless otherwise agreed to by the District, the District shall enter into an agreement with the Pima County Treasurer to collect the District's special assessments as provided in A.R.S. §48-721B. PHX 327532401 v4 8/27/2007 40 Section 6. 4. (a) Other than (1) this Agreement, (2) the Developer GO Bonds secured by ad valorem taxes as described in Section 6.2 above, (3) any obligations necessary in connection with either of the foregoing, (4) revenue bonds as described below and (5) assessment bonds as described in Section 6.3 above, the District shall not incur, or otherwise become obligated with respect to, any other obligations. (b) The District may issue revenue bonds only in accordance with the Town's Policy Guidelines and Application Procedures for the Establishment of Community Facilities Districts originally approved by the Town Council on May 21, 1997, as amended from time to time by the Town (the "Town CFD Policies"). ARTICLE VII ACCEPTANCE BY THE MUNICIPALITY . Section 7.1. Simultaneously with the payment of the related Segment Price or completion of construction of a Project, the Segment of Acquisition Infrastructure, to the extent of the interest retained by Saguaro Reserve, KB Home Tucson or Empire Land therein, or the Project constructed is hereby accepted (including for purposes of maintenance and operation thereof if not theretofore provided) by the Municipality, subject to the conditions pursuant to which facilities such as the Acquisition Projects and the Projects so constructed are typically accepted by the Municipality and thereafter shall be made available for use by the general public. 41 PHX 32753240lv4 8/27/2007 ARTICLE VIII INDEMNIFICATION Section 8.1. (a) Saguaro Reserve, KB Home Tucson and Empire Land (1) shall, jointly and severally, indemnify and hold harmless each Indemnified Party for, from and against any and all losses, claims, damages or liabilities, joint or several, arising from the actions of Saguaro Reserve, KB Home Tucson or Empire Land (including, without limitation, the provision of information pertaining to the formation of the District by Saguaro Reserve, KB Home Tucson or Empire Land) or a failure of performance by Saguaro Reserve, KB Home Tucson or Empire Land, relating to the formation, activities or administration of the District, or the carrying out of the provisions of this Section, including particularly but not by way of limitation and as limited by the aforesaid for any losses, claims or damages or liabilities (A) related to any Acquisition Project Construction Contract or Project constructed pursuant to a Construc- tion Contract including claims of any contractor, vendor, subcontrac- tor or supplier, (B) to which any such Indemnified Party may become subject, under any statute or regulation at law or in equity or other- wise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact set forth in any offering document relating to the Developer Bonds, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or which is necessary to make the statements 42 PHX 327532401 v4 8/27/2007 therein, in light of the circumstances in which they were made, not misleading in any material respect and (C) to the extent of the aggregate amount paid in any settlement of any litigation commenced or threatened arising from a claim based upon any such ?untrue statement or alleged untrue statement or omission or alleged ?omission if such settlement is effected with the written consent of Saguaro Reserve (which consent shall not be unreasonably withheld) and (2) shall reimburse any legal or other expenses reasonably incurred by any such Indemnified Party in connection with investigating or defending any such loss, claim, damage, liability or action. (b) Section 8.1(a) shall, however, not be applicable to any of the following: (1) matters involving any gross negligence or willful misconduct of any Indemnified Party, (2) any loss, claim, damage or liability for which insurance coverage is actually procured which names the District as an insured, in order to provide insurance against the errors and omissions of the District Board or the other representatives, agents or employees of the District and any loss, claim, damage or liability that is covered by any commercial general liability i,insurance policy actually procured which names the District as an insured (including those of Saguaro Reserve under which the District is to be added as an additional named insured), (3) any loss, claim, damage or', liability aris- ing from or relating to defects in any Infrastructure that are not i known to Saguaro Reserve and are discovered one (1?) year or more 43 PHX 32753240lv4 8/27/2007 following acceptance thereof by the Municipality pursuant to Section 7. 1 or (4) matters arising from or involving any breach of this Agreement by the District or any other Indemnified Party. (c) An Indemnified Party shall, promptly after the receipt of notice of a written threat of the commencement of any action against such Indemnified Party in respect of which indemnifica- tion may be sought against Saguaro Reserve, KB Home Tucson or Empire Land, notify Saguaro Reserve in writing of the commencement thereof and provide a copy of the written threat received by such Indemnified Party. Failure of the Indemnified Party to give such notice shall reduce the liability of Saguaro Reserve, KB Home Tucson or Empire Land by the amount of damages attributable to the failure of the Indemnified Party to give such notice to Empire Land, but the omission to notify Saguaro Reserve of any such action shall not relieve Saguaro Reserve, KB Home Tucson or Saguaro Reserve from any liability that any of them may have to such Indemnified Party otherwise than under this section. In case any such action shall be brought against an Indemnified Party and such Indemnified Party shall notify Saguaro Reserve of the commencement thereof, Empire Land may, or if so requested by such Indemnified Party shall, participate therein or defend the Indemnified Party therein, with counsel satisfactory to such Indemnified Party and Saguaro Reserve (it being understood that, except as hereinafter provided, none of Saguaro Reserve, KB Home Tucson nor Saguaro Reserve, shall be liable for the expenses of more 44 PHX 32753240lv4 8/27/2007 than one counsel representing the Indemnified Parties in such action), and after notice from Saguaro Reserve to such Indemnified Party of an election so to assume the defense thereof, none of Saguaro Reserve, KB Home Tucson nor Saguaro Reserve shall be liable to such Indemnified Party under this section for any legal or other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof; provided, however, that unless and until Saguaro Reserve defends any such action at the request of such Indemnified Party, Saguaro Reserve shall have the right to participate at its own expense in the defense of any such action. If Saguaro Reserve shall not have employed counsel to defend any such action or if an Indemnified Party shall have reasonably concluded that there may be defenses available to it and/or other Indemnified Parties that are different from or additional to those available to Saguaro Reserve (in which case Saguaro Reserve shall not have the right to direct the defense of such action on behalf of such Indemnified Party) or to other Indemnified Parties, the legal and other expenses, including the expense of separate counsel, incurred by such Indemnified Party shall be borne by Saguaro Reserve. (d) None of Saguaro Reserve, KB Home Tucson nor Empire Land shall have any obligation to indemnify or hold harmless any Indemnified Party until such time that the Indemnified Party has exhausted all other insurance, risk retention or other indemnification options or remedies available to it. In the event that the insurance, risk retention or other indemnification options or remedies of the Indemnified Party are insufficient to reimburse the Indemnified Party 45 PHX 327532401 v4 8/27/2007 for its actual losses, claims, damages or liabilities, then, and only then, shall the Indemnified Party have a right to indemnification from Saguaro Reserve, KB Home Tucson and Empire Land, and even then only to the extent that indemnification by Saguaro Reserve, KB Home Tucson and Empire Land will be secondary to, and in excess of, the primary insurance, risk retention or other indemnification options or remedies of the Indemnified Party. Section 8.2. To the extent permitted by applicable law, the District shall indemnify, defend and hold harmless each Indemni- fied Party for, from and against any and all liabilities, claims or demands for injury or death to persons or damage to property arising from in connection with, or relating to the performance of this Agreement. The District shall not, however, be obligated to indemnify the District Indemnified Parties with respect to damages caused by the negligence or willful misconduct of the District Indemnified Parties. The District shall not indemnify, defend and hold harmless the Munici- pality with respect to matters relating to public infrastructure owned by the Municipality. ARTICLE IX PAYMENT OF CERTAIN EXPENSES AND COSTS Section 9.1. To provide for expenses and costs for agents or third parties required to administer the Developer Bonds and to levy and collect ad valo-rem taxes for payment of the Developer Bonds and any purposes otherwise related to such activities of the District, amounts shall be budgeted by the District Board each Fiscal Year in 46 PHX 32753240lv4 8/27/2007 the District Budget for such purposes and shall be paid from amounts available from the tax levy described in Section 6.2(d). Section 9.2. To provide for the payment of the District Expenses and the O/M Expenses, the District Board shall levy all or a portion of the O/M Tax and shall apply the collections of the O/M Tax first to pay the District Expenses and second to pay the O/M Expenses. To the extent the collections of the O/M Tax are not sufficient to pay the District Expenses and the O/M Expenses, Saguaro Reserve, KB Home Tucson and Empire Land shall, to the extent of reasonable amounts necessary therefor, be liable and obligated, jointly and severally, to pay or, on a reasonable basis acceptable to the District Manager in his sole discretion, obligate a homeowner's or similar association to pay, to the District on July 1 of each Fiscal Year of the District the amount of any shortfall indicated in the District Budget with respect to the District Expenses and the O/M Expenses, including any amount required because of any shortfall in the prior Fiscal Year as provided in such District Budget and no matter how such shortfall was otherwise funded. The District shall only levy the O/M Tax in an amount necessary for the District Expenses and the O/M Expenses reflected in the District Budget for the Fiscal Year of the District and only in reasonable amounts therefor. The collective obligation of Saguaro Reserve, Empire Land and KB Home Tucson pursuant to this Section shall not exceed $100,000 in total per Fiscal Year beginning with the first full Fiscal Year after the execution and delivery hereof by the District [provided, however, that for any period prior thereto such obligations shall not exceed $100,000 times the number of full months 47 PHX 327532401 v4 8/27/2007 remaining in such Fiscal Year divided by twelve (12) ] and shall only be effective until the July 1 after the levy.of the O/M Tax at $0.30 per $100.00 of secondary assessed valuation could first result in collections of $100,000, given the tax base of the District for the applicable tax year and assuming a delinquency factor of five percent (5%) . Section 9. 3. Saguaro Reserve shall advan?e $75,000, as a deposit on account, to be applied by the Municipality to pay Initial Expenses upon written demand by the District Manager. When $50,000 of the $75,000 deposit is expended, an accounting will bE made to Saguaro Reserve of all amounts incurred by the Municipality for the Initial Expenses to date, and Saguaro Reserve, KB Home Tucson and Empire Land shall be liable and obligated, jointly and severally, to provide additional funds as necessary for the Initial Expenses in an amount requested by the Municipality which must be paid forthwith and which shall thereafter be the subject of a similar accounting. Amounts paid pursuant to this Section by Saguaro Reserve, KB Home Tucson and Empire Land which may be reimbursed under applicable law to Saguaro Reserve, KB Home Tucson and Empire Land from the proceeds derived from the sale of the Developer Bonds shall, without the need for further request by Saguaro Reserve, but subject to the extent of available amounts therefor, be included as part of the purpose of the Developer Bonds. The obligations of Saguaro Reserve, KB Home Tucson and Empire Land pursuant to this Section shall only be effective until the July 1 after the date that the first collections of the O/M 'Fax are received by the District. 48 PHX 327532401 v4 8/27/2007 ARTICLE X MISCELLANEOUS Section 10.1. None of the Municipality, the District, Saguaro Reserve, KB Home Tucson nor Empire Land shall knowingly take, or cause to be taken, any action which would cause interest on any Developer Bond to be includable in gross income for federal income tax purposes pursuant to Section 61 of the Internal Revenue Code of 1986, as amended. Section 10.2. (a) To provide evidence satisfactory to the District Manager that any prospective purchaser of land within the boundaries of the District has been notified that such land is within the boundaries of the District and that the Developer Bonds may be then or in the future, be outstanding, the Disclosure Statement shall be produced by Saguaro Reserve, or, subsequent to a sale of land by Saguaro Reserve, shall be produced by each homebuilder to whom Saguaro Reserve has sold land; provided, however, that the Disclosure Statement may be modified as necessary in the future to adequately describe the District and the Developer Bonds and the source of payment for debt service therefor as agreed by the District Manager and Saguaro Reserve. (b) Saguaro Reserve shall or shall require that Saguaro Reserve, KB Home Tucson or Empire Land or each homebuilder to whom Saguaro Reserve, KB Home Tucson or Empire Land has sold land: (1) cause any purchaser of land to sign the Disclosure Statement upon entering into a contract for purchasing such land; 49 PHX 32753240lv4 8/27/2007 (2) provide a copy of each fully executed Dis- closure Statement to be filed with the District Manager and (3) provide such information and documents, including audited financial statements to any necessary repository or depository, but only to the extent necessary for the underwriters of the Developer Bonds to comply with Rule 15c2-12 of the Securities Exchange Act of 1934. Section 10. 3. This Agreement shall be binding upon and shall inure to the benefit of the parties to this Agreement and their respective legal representatives, successors and assigns and the rights and obligations under the Agreement are attached to and run with the Property; provided, however, that none of the parties hereto shall be entitled to assign its right hereunder or under any document contemplated hereby without the prior written consent of the other parties to this Agreement. This Agreement shall not create conditions or exceptions to title or covenants running with any individual lots into which the Property is subdivided. Any title insurer can rely on the language of this Section when issuing any commitment to insure title to any individual lot or when issuing a title insurance policy for any individual lot. So long as not prohibited by law, this Agreement shall automatically terminate as to any individual lot (and not in bulk) , without the necessity of any notice, agreement or recording by or between the parties, upon conveyance of the lot to a homebuyer or commercial purchaser by a recorded deed. For purposes of this Section, "lot" shall be any lot upon which a home or commercial building has been completely constructed and approved to be occupied so PHX 327532401 v4 8/27/2007 that is contained in a recorded subdivision plat that has been approved by the Municipality. Section 10.4. Each party hereto shall, promptly upon the request of any other, have acknowledged and delivered to the other any and all further instruments and assurances reasonably requested or appropriate to evidence or give effect to the provisions of this Agreement. Section 10.5. This Agreement sets forth the entire under- standing of the parties as to the matters set forth herein as of the date this Agreement is executed and cannot be altered or otherwise amended except pursuant to an instrument in writing signed by each of the parties hereto. This Agreement is intended to reflect the mutual intent of the parties with respect to the subject matter hereof, and as such no rule of strict construction shall be applied against any party. Section 10.6. This Agreement shall be governed by and interpreted in accordance with the laws of the State. Section 10.7. The waiver by any party hereto of any right granted to it under this Agreement shall not be deemed to be a waiver of any other right granted in this Agreement nor shall the same be deemed to be a waiver of a subsequent right obtained by reason of the continuation of any matter previously waived under or by this Agreement. Section 10.8. This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be 51 PHX 327532401 v4 8/27/2007 deemed to be an original, but all of which taken together shall con- stitute one of the same instrument. Section 10.9. The Municipality and the District may, within three years after its execution, cancel this Agreement, without penalty or further obligation, if any person significantly involved in initiating, negotiating, securing, drafting or creating this Agreement on behalf of the Municipality or the District, respectively, is, at any time while this Agreement is in effect, an employee or agent of Saguaro Reserve, KB Home Tucson and Empire Land in any capacity or a consultant to any other party of this Agreement with respect to the subject matter of this Agreement and, if applicable, may recoup any fee or commission paid or due any person significantly involved in initiating, negotiating, securing, drafting or creating this Agreement on behalf of the Municipality or the District, respectively, from Saguaro Reserve, KB Home Tucson and Empire Land arising as the result of this Agreement. Saguaro Reserve, KB Home Tucson and Empire Land have not taken and shall not take any action which would cause any person described in the preceding sentence to be or become an employee or agent of Saguaro Reserve, KB Home Tucson and Empire Land in any capacity or a consultant to any party to this Agreement with respect to the subject matter of this Agreement. Section 10.10 The term of this Agreement shall be as of the date of the execution and delivery hereof by each of the parties hereto and shall expire upon the earlier of (i) the agreement of the District, the Municipality, Saguaro Reserve, KB Home Tucson and Empire Land to the termination hereof, (ii) September 1, 2057, and (iii) the 52 PHX 32753240lv4 8/27/2007 date on which all of the Developer Bonds are paid in full or defeased to the fullest extent possible pursuant to the Act. Section 10.11. All notices, certificates or other communi- cations hereunder (including in the Exhibits hereto) shall be suffi- ciently given and shall be deemed to have been received 48 hours after deposit in the United States mail in registered or certified form with postage fully prepaid addressed as follows: If to the Municipality: 11555 North Civic Center Drive Marana, Arizona.85653 Attention: Manager If to the District: 11555 North Civic Center Drive Marana, Arizona 85653 Attention: Manager If to Saguaro Reserve: 3536 Concours Street, Suite 300 Ontario, California 91764 Attention: Chief Legal Officer With a copy to: Empire Land, LLC 3536 Concours Street, Suite 300 Ontario, California 91764 Attention: Chief Financial Officer If to Empire Land, LLC: 3536 Concours Street, Suite 300 Ontario, California 91764 Attention: Chief Legal Officer With a copy to: Empire Land, LLC 3536 Concours Street, Suite 300 Ontario, California 91764 Attention: Chief Financial officer PHX 327532401 v4 8/27/2007 53 If to KB Home Tucson, Inc.: 250 S. Craycroft Road, Suite 300 Tucson, Arizona 85711 Attention: Chief Legal Officer Any of the foregoing, by notice given hereunder, may designate differ- ent addresses to which subsequent notices, certificates or other com- munications will be sent. Section 10.12. If any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision thereof, and such ruling person or tribunal shall not deem the entire Agreement to be invalid or unenforceable. Section 10.13. The headings or titles of the several Arti- cles and Sections hereof and in the Exhibits hereto, and any table of contents appended to copies hereof and thereof, shall be solely for convenience of reference and shall not affect the meaning, construc- tion or effect of this Agreement. Section 10. 14. This Agreement does not relieve any party hereto of any obligation or responsibility imposed upon it by law; provided, however, that if the provisions of this Agreement conflict in any particular with those of the Land Development Agreement relat- ing to the District, the provisions of the Land Agreement, as amended, shall supersede and control those of this Agreement, as amended, in all respects. Section 10.15. No later than ten (10) days after this Agreement is executed and delivered by each of the parties hereto, Saguaro Reserve shall on behalf of the Municipality and the District 54 PHX 327532401 v4 8/27/2007 record a copy of this Agreement with the County Recorder of Pima County, Arizona. Section 10.16. Unless otherwise expressly provided, the representations, covenants, indemnities and other agreements contained herein shall be deemed to be material and continuing, shall not be merged and shall survive any conveyance or transfer provided herein. Section 10. 17. If any party hereto shall be unable to observe or perform any covenant or condition herein by reason of Force Majeure, then the failure to observe or perform such covenant or con- dition shall not constitute a default hereunder so long as such party shall use its best efforts to remedy with all reasonable dispatch the event or condition causing such inability and such event or condition can be cured within a reasonable amount of time. Section 10. 18. Whenever the consent or approval of any party hereto, or of any agency therefor, shall be required under the provisions hereof, such consent or approval shall not be unreasonably withheld, conditioned or delayed unless specifically otherwise limited as provided herein. Section 10.19. Notwithstanding any other provision of this Agreement to the contrary, the provisions of Sections 7.1, 8.1, 8.2, 9.3, 10.1, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8, 10.9, 10.10, 10.11, 10.12, 10.13, 10.14, 10.15, 10.17, 10.18, 10.19 and 10.20 are the only provisions that are effective against the Municipality for purposes of the Intergovernmental Agreement Act as the Intergovernmental Agreement Act is intended to be applied for purposes of this Agreement. 55 PHX 327532401 v4 8/27/2007 Section 10.20. (a) This Agreement in no way acquiesces to or obligates the Municipality or the District to perform a legislative act. (b) Failure or unreasonable delay by any party to perform or otherwise act in accordance with any term or provision of this Agreement for a period of thirty (30) days (hereinafter referred to as the "Cure Period") after actual receipt of written notice thereof from any other party, shall constitute a default under this Agreement; provided, however, that if the failure or delay is such that more than thirty (30) days would reasonably be required to perform such action or comply with any term or provision hereof, or there is existing a Force Majeure event, then such party shall have such additional time as may be necessary to perform or comply so long as such party commences performance or compliance within a reasonable period of time under the facts applicable to each situation; provided further that the foregoing shall not apply to the last sentence of Section 9. 2. Said notice shall specify the nature of the alleged default and the manner in which said default may be satisfactorily cured, if possible. In the event such default is not cured within the Cure Period, any non-defaulting party shall have all rights and remedies that are set forth in the next subsection. (c) Except as provided in subsection (b), the parties shall be limited to the remedies and the dispute resolution procedure set forth in this subsection and subsection (d). Any decision rend- ered by the Panel pursuant to the provisions of subsection (d) shall be binding on the parties unless and until a court of competent juris- 56 PHX 327532401 v4 8/27/2007 diction renders a conflicting final decision on the disputed issue, and if any party does not abide by the decision rendered by the Panel during the pendency of an action before the court of competent jurisdiction or otherwise (if no court action), any other party may institute an action for money damages on the issues that were the subject of the Panel's decision and/or any other relief as may be permitted by law. (d) (1) If an event of default is not cured within the Cure Period, any non-defaulting party may institute the dispute resolution process set forth in this subsection (hereinafter referred to as the "Process") by providing written notice initiating the Proc- ess (hereinafter referred to as the "Initiation Notice") to the defaulting party. (2) Within thirty (30) days after delivery of the Initiation Notice, each involved party shall appoint one person to serve on an arbitration panel (herein referred to as the "Panel") . Within twenty-five (25) days after delivery of the Initiation Notice, the persons appointed to serve on the Panel shall themselves jointly appoint one person to serve as a co-member of the Panel. Such jointly appointed person shall function as the chairperson of the Panel. (3) The remedies available for award by the Panel shall be limited to specific performance, declaratory relief and injunctive relief, all other forms of relief being herein expressly waived by all parties. (4) Any party can petition the Panel for an expedited hearing if circumstances justify it. Such circumstances 57 PHX 327532401 v4 8/27/2007 shall be similar to what a court would view as appropriate for injunc- tive relief or temporary restraining orders. In any event, the hear- ing of any dispute not expedited shall commence as soon as practica- ble, but in no event later than forty-five (45) days after selection of the chairperson of the Panel. This deadline can be extended only with the consent of all parties to the dispute or by decision of the Panel upon a showing of emergency circumstances. (5) The chairperson of the Panel shall conduct the hearing pursuant to the Center For Public Resources' Rules for Non-Administered Arbitration of Business Disputes then in effect. The chairperson of the Panel shall determine the nature and scope of dis- covery, if any, and the manner of presentation of relevant evidence, consistent with the deadlines provided herein, and the parties' objec- tive that disputes be resolved in a prompt and efficient manner. No discovery may be had of privileged materials or information. The chairperson of the Panel upon proper application shall issue such orders as may be necessary and permissible under law to protect confidential, proprietary or sensitive materials or information from public disclosure or other Misuse. Any party may make application to the Court to have a protective order entered as may be appropriate to confirm such orders of the chairperson of the Panel. (6) The hearing, once commenced, shall proceed from business day to business day until concluded, absent a showing of emergency circumstances. Except as otherwise provided herein, the Process shall be governed by the Uniform Arbitration Act as enacted in the State. 58 PHX 327532401A 8/27/2007 (7) The Panel shall, within fifteen (15) days from the conclusion of any hearing, issue its written decision, including the rationale and support for its decision. The decision shall be rendered in accordance with this Agreement and the laws of the State. (8) Any involved party may appeal the decision of the Panel to the Court for a de novo review of the issues decided by the Panel, so long as such appeal is made within thirty (30) days after the Panel's decision is actually received by such party. The remedies available for award by the Court shall be limited to specific performance, declaratory relief and injunctive relief, with all other forms of relief being herein expressly waived by all parties. During any pendency of an appeal, the decision of the Panel shall be binding on both parties until the Court renders a binding decision. If a non- prevailing party in the Process fails to appeal to the Court within the time frame set forth herein, the decision of the Panel shall be final and binding. If one party does not comply with the decision of the Panel during the pendency of the action before the Court or otherwise, then another party shall be entitled to exercise all rights and remedies that may be available under law or equity, including without limitation the right to institute an action for money damages related to the default that was the subject of the Panel's decision and the provisions of this subsection shall not apply to such an exercise of rights and remedies. (9) All fees and costs associated with the Process before the Panel, including without limitation the fees of the 59 PHX 327532401 v4 8/27/2007 Panel, other fees, and the prevailing party's attorneys' fees, expert witness fees and costs, shall be paid by the non-prevailing party or parties. The determination of prevailing and non-prevailing parties, and the appropriate allocation of fees and costs, shall be included in the decision by the Panel. Similarly, all fees and costs associated with an appeal to the Court or any appellate court thereafter, includ- ing without limitation, the prevailing party's attorneys' fees, expert witness fees and costs, shall be paid by the non-prevailing party. The determination of prevailing and non-prevailing parties, and the appropriate allocation of fees and costs, shall be included in the decision by the Court. 60 PHX 32753240lv4 8/27/2007 IN WITNESS WHEREOF, the officers of the Municipality and of the District have duly affixed their signatures and attestations, and the duly authorized officer(s) of Saguaro Reserve, KB Home Tucson and Empire Land have affixed their signatures, all as of the day and year first written above. TOWN OF MARANA, ARIZONA ATTEST: ................................ Jocelyn C. Bronson, Town Clerk Pursuant to A.R.S. Section 11-952(D), this Agreement has been reviewed by the undersigned attorney for the Municipality who has determined that this Agreement is in proper form and is within the powers and author- ity granted pursuant to the laws of this State to the Munici- pality ................................ Frank Cassidy, Town Attorney By .................................... , Mayor 61 PHX 327532401 v4 8/2712007 SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT ATTEST: ................................ Jocelyn C. B ronson, District Clerk Pursuant to A.R.S. Section 11-952(D), this Agreement has been reviewed by the undersigned attorney for the District, who has determined that this Agree- ment is in proper form and is within the powers and authority granted pursuant to the laws Of this State to the District ................................ Frank Cassidy, D , istrict Counsel PHX 327532401 v4 8127/2007 By .................................... Chairperson, District Board 62 SAGUARO RESERVE, LLC, a Delaware limited liability company By: Empire Land, LLC, a California limited liability company, its Managing Member By: Empire Partners, Inc., a California corporation, its Managing Member By: Its: EMPIRE LAND, LLC, a California limited liability company By: Empire Partners, Inc., a California corporation, its Managing Member By: Its: KB HOME TUCSON, INC., an Arizona corporation By .................................... , Manager 63 PHX 327532401 v4 8/27/2007 STATE OF ARIZONA ss. COUNTY OF PIMA The foregoing instrument was acknowledged before me on this ...... day of .............. 2007, by . as Mayor of the Town of Marana, Arizona, a municipal corporation under the laws of the State of Arizona. ...................................... Notary Public My commission expires: STATE OF ARIZONA ss COUNTY OF PIMA The foregoing instrument was acknowledged before me on this ...... day of .............. 2007, by as Chairperson of the District Board of Saguaro Springs Community Facilities Dis- trict, an Arizona community facilities district. ...................................... Notary Public My commission expires: 64 PHX 327532401 v4 8/27/2007 STATE OF CALIFORNIA ) ss. COUNTY OF .............. The foregoing instrument was acknowledged before me this ...... day of ................ 2007, by as Secre- tary/Treasurer of SAGUARO RESERVE, LLC. ...................................... Notary Public My Commission Expires: STATE OF CALIFORNIA ) ss. COUNTY OF .............. The foregoing instrument was acknowledged before me this ...... day of ................ 2007, by . as Manager of EMPIRE LAND, LLC, a California limited liability company, on behalf of the limited liability company. ....................................... Notary Public My Commission Expires: STATE OF ARIZONA ss. COUNTY OF .............. 65 PHX 327532401 v4 8/27/2007 The foregoing instrument was acknowledged before me this ...... day of ................ 2007, by . as Manager of KB HOME TUCSON, INC., an Arizona corporation, on behalf of the corporation. My Commission Expires: ...... .... . Notary Publi c 66 PHX 327532401 v4 8/27/2007 Consent and Agreement The undersigned hereby consents to the reco Agreement on the Property. -dation of this First American Title nsurance Company, a California corporation, as Trustee under Trust N 9089 and not otherwise By: Title: First American Title nsurance Company, a California corporation, as Trustee under Trust N 9092 and not otherwise By: Title: 67 PHX 327532401 V4 8/27/2007 STATE OF ARIZONA ss. COUNTY OF .............. The foregoing instrument was acknowledged before me this ...... day of ............... 1 2007, by r as of FIRST AMERICAN TITLE INSURANCE COMPANY, a California Corporation, as Trustee under Trust No. 9089 and not otherwise. My Commission Expires: STATE OF ARIZONA ) ss. COUNTY OF .............. ...................................... Notary Public The foregoing instrument was acknowledged before me this ...... day of ............... 1 2007, by -), as of FIRST AMERICAN TITLE INSURANCE COMPANY, a California Corporation, as Trustee under Trust No. 9092 and not otherwise. ...................................... Notary Public My Commission Expires: 68 PHX 327532401 v4 8/27/2007 Consent and Agreement The undersigned, as beneficiary and trustee, respectively, pursuant to the following encumbrance, hereby consent to the recordation of this Agreement on the Property: Deed of Trust, dated August 15, 2005, from Saguaro Reserve LLC, a Delaware limited liability company, as successor to Best Associates II, LLC, an Arizona limited company to Fidelity National Title Agency, Inc. for the benefit of KeyBank National Association, a national banking association, recorded on August 16, 2005, in Docket 12617, page 2065, in the records of the office of the Recorder of Pima County, Arizona and as amended and modified Dated 1 2007 BENEFICIARY: KEYBANK NATIONAL ASSOCIATION, a national banking association By .................................... TRUSTEE: FIDELITY NATIONAL TITLE AGENCY, INC., a corporation By .................................... Its: ................................ 69 PHX 327532401 v4 8/27/2007 STATE OF ARIZONA ) ) ss. COUNTY OF .............. The foregoing instrument was acknowledged before me this ...... day of ................ 2007, by ............................. I as ......................... of KEYBANK NATIONAL ASSOCIATION, a national banking association, on behalf of the corporation. ...................................... Notary Public My Commission Expires: STATE OF ARIZONA ss. COUNTY OF .............. The foregoing instrument was acknowledged before me this ...... day of ................ 2007, by ............................. I as ......................... of FIDELITY NATIONAL TITLE INSURANCE COMPANY, a California corporation, on behalf of the corporation. ...................................... Notary Public My Commission Expires: 70 PHX 327532401v4 8/27/2007 ATTACHMENTS: EXHIBIT A Legal Description Of The Property EXHIBIT B Intentionally left blank EXHIBIT C Form Of Certificate Of Engineers For Conveyance Of Segment Of Project EXHIBIT D Form Of Conveyance Of Segment Of Project EXHIBIT E Form Of Disclosure Statement 71 PHX 327532401 v4 8/27/2007 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY PHX 327532401v4 8/27/2007 Stantec Consulting Inc. 201 North Bonita Avenue Suite 101 Tucson AZ 85745-2999 Tel: (520) 750-7474 Fax: (520) 750-7470 stantec.corn Stantec PROPERTY DESCRIPTION SAGUARO SPRINGS DESCRIPTION of property located in portions of Sections 17, 18 and 19, Township 12 Soul Range 12 East and a portion of Section 13, Township 12 South, Range 11 East, Gila and S; River Meridian, Pima County, Arizona. Said property being more fully described as follows: Blocks 1 thru 10 and A thru D together with Lots I thru 9, A and B, as shown on the Block PI for SAGUARO SPRINGS; recorded in Book 58 of Maps and Plats, Page 23, in the office of tl Pima County Recorder, Pima County, Arizona. Together with: A portion of said Section 13, as described in Docket 12208, Page 1961, Pima Cour Records. Excepting therefrom: Lot B of said Block Plat Also excepting therefrom: That portion of Block 5 of said Block Plat to be dedicated for use as a school site, as recordl in Docket 12711, Page 10927, Pima County Records. Also excepting therefrom: That portion of Block 5 of said Block Plat to be dedicated for use as a park site, as recorded Docket 12755, Page 4378, Pima County Records. Said parcel containing a total area of 32,839,128 square feet or 753.88 acres of land, more less. Disclaimer Stantec Consulting accepts no liability for this description if it has been modified or reformatted in any way from its original format and content, or used for any purpose other than that fo) which it was originally intended. L Prepared by Nathan L. Gardner, RLS 36786 Prepared on June 14, 2007 Prepared for and on behalf of Stantec Consulting Inc. 36786 Project Number: 185621935 NATHAN L 6ARDNER w:\active\l 85621935\lots\21935-Propeft"wned-by_empire-070614.doc I 12 7 Lambert Lane 1J,18 Lo- & - 1'-'9- & A Ork 1 1- 0 School Site Dkt 12711, Pg. 10927 (Excluded) Park Site Dkt 12755, Pg. 4J78 (Excluded) 1 Lot B, Lift Station (E?cluded) 7 8 18" 17 ock, ck, 1-6- 1 / " " / "' /I Ill'Blolck' 4 Block j//.c--) Block 7 Block 8 \-Block B Dkt 12208, Pg. 1961 000, REFERENCE- SA GUA RO SPRINGS BL OCK PL A T BOOK 58 MAPS & PLATS, PAGE 2J N Block 10 1 20 IHIS SEM IS FOR MW PLOHM ONLY AND DOES NOT Jur MOM A PROPM B=aW WM is effewpmlect Stantec Consulting SAGUARO RESERVE 201 North Bonito Ave T 12 S, R 12 E, SECTIONS 17, 18 & 1 Tucson AZ U.S.A. T 12 S, R 11 E, SECTION 13. PIMA COI Figure No. PHX 327532401 v4 8/27/2007 EXHIBIT B [intentionally omitted] B-1 PHX 327532401 v4 8/27/2007 B-2 PHX 32753240lv4 8/27/2007 EXHIBIT C FORM OF CERTIFICATE OF ENGINEERS FOR CONVEYANCE OF SEGMENT OF ACQUISITION PROJECT CERTIFICATE OF ENGINEERS FOR CONVEYANCE OF SEGMENT OF ACQUISITION PROJECT (insert description of Acquisition ProjectlSpgment) STATE OF ARIZONA COUNTY OF PIMA TOWN OF MARANA ss. SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT We the undersigned, being Professional Engineers in the State of Arizona and, respectively, the duly appointed District Engi- neer for Saguaro Springs Community Facilities District (hereinafter referred to as the "District"), and the engineer employed by Saguaro Reserve, LLC (hereinafter referred to as "Saguaro Reserve"), each hereby certify for purposes of the District Development, Financing Participation and Intergovernmental Agreement (Saguaro , Springs Community Facilities District), dated as of r 2007 (hereinafter referred to as the "Agreement"), by and among the District, the Town of Marana, Arizona, Saguaro Reserve, LLC, KB Home Tucson, Inc. and Empire Land, LLC that: 1. The Segment indicated above has been performed in every detail pursuant to the Plans and Specifications (as such term and all of the other initially capitalized terms in ;this Certificate are defined in the Agreement) and the Acquisition Proj:ect Construction Contract (as modified by any change orders permitted by the Agreement) for such Segment. 2. The Segment Price as publicly bid and including the cost of approved change orders for such Segment is $ .............. 3. Saguaro Reserve provided for compliance with the requirements for public procurement for such Segment as required by the Agreement (including, particularly but not by way of limitation, Title 34, Chapter 2, Article 1, Arizona Revised Statutes, as amended) in connection with award of the Acquisition Project Construction Contract for such Segment. 4. Saguaro Reserve filed all construction plans, speci- fications, contract documents, and supporting engineer,ing data for the construction or installation of such Segment with the Municipality. C-1 PHX 327532401V4 8/27/2007 5. Saguaro Reserve obtained good and sufficient perform- ance and payment bonds in connection with such Contract. DATED AND SEALED THIS ...... DAY OF ............... f 200.. [P.E. SEAL] By .................................... District Engineer [P.E. SEAL] By .................................... Engineer for Saguaro Reserve [Confirmed for purposes of Section 3.5 of the Development Agreement by ...................................... Manager for Saguaro Springs Community Facilities District*] [THIS WILL BE REQUIRED FOR EVERY SE04ENT ACQUIRED WITH PROCEEDS OF TRE SALE OF TRE DEVELOPER BONDS!!!] To be inserted if the provisions of Section 3.5 hereof are applicable to the respective Segment of the Project C-2 PHX 327532401 v4 8/27/2007 EXHIBIT D FORM OF CONVEYANCE OF SEGMENT OF ACQUISITION PROJECT CONVEYANCE OF SEGMENT OF ACQUISITION PROJECT (insert description of Acquisition ProjectlSegment) STATE OF ARIZONA COUNTY OF PIMA TOWN OF MARANA ss. SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT KNOW ALL MEN BY THESE PRESENTS THAT: ....................................... (11 ........... ), for good and valuable consideration received by .......... from Saguaro Springs Community Facilities District, a community facilities district formed by the Town of Marana, Arizona (the "Municipality"), and duly organized and validly existing pursuant to the laws of the State of Arizona (the "District"), receipt of which is hereby acknowledged [, and the promise of the District to hereafter pay the amounts described in the hereinafter described Development Agreement],* does by these presents grant, bargain, sell and convey to the District, its succes- sors and assigns, all right, title and interest in and to the follow- ing described property, being the subject of a District Development, Financing Participation and Intergovernmental Agreement (Saguaro Springs Community Facilities District), dated as of 1, 2007, by and among Municipality, the District, Saguaro Reserve, LLC, KB Home Tucson, Inc. and Empire Land, LLC and more completely described in such Development Agreement: [Insert description of Acquisition Project/Segment] together with any and all benefits, including warranties and performance and payment bonds, under the Acquisition Project Construc- tion Contract (as such term is defined in such Development Agreement) or relating thereto, all of which are or shall be located within utility or other public easements dedicated or to be dedicated by plat or otherwise free and clear of any and all liens, easements, restric- tions, conditions, or encumbrances affecting the same [, such subse- quent dedications not affecting the promise of the District to here- after pay the amounts described in such Development Agreement],* but subject to all taxes and other assessments, reservations in patents, Insert with respect to any acquisition financed pursuant to Section 5.2(a) hereof. D-1 PHX 32753240lv4 8/27/2007 and all easements, rights-of-way, encumbrances, liens, covenants, conditions, restrictions, obligations, leases, and liabilities or other matters as set forth on Exhibit I hereto. TO HAVE AND TO HOLD the above-described property, together with all and singular the rights and appurtenances thereunto in any- wise belonging, including all necessary rights of ingress, egress, and regress, subject, however, to the above-described exception(s) and reservation(s), unto the District, its successors and assigns, for- ever; and .......... does hereby bind itself, its successors and assigns to warrant and forever defend, all and singular, the above- described property, subject to such exception(s) and reservation(s), u nto the District, its successors and assigns, against the acts of .......... and no other. binds and obligates itself, its successors and assigns, to execute and deliver at the request of the District any other or additional instruments of transfer, bills of sale, convey- ances, or other instruments or documents which may be necessary or desirable to evidence more completely or to perfect the transfer to the District of the above-described property, subject to the excep- tion(s) and reservation(s) hereinabove provided. This conveyance is made pursuant to such Development Agree- ment, and .......... hereby agrees that the amounts specified above and paid [or promised to be paid*] to .......... hereunder satisfy in full the obligations of the District under such Development Agreement and hereby releases the District from any further responsibility to make payment to .......... under such Development Agreement except as above provided. in addition to the other representations and warranties herein, specifically makes the following representations and warranties: 1. .......... has the full legal right and authority to make the sale, transfer, and assignment herein provided. 2. .......... is not a party to any written or oral contract which adversely affects this Conveyance. 3. .......... is not subject to any bylaw, agreement, mortgage, lien, lease, instrument, order, judgment, decree, or other restriction of any kind or character which would prevent the execution of this Conveyance. 4. .......... is not engaged in or threatened with any legal action or proceeding, nor is it under any investigation, which prevents the execution of this Conveyance. 5. The person executing this Conveyance on behalf of .......... has full authority to do so, and no further official action need be taken by .......... to validate this Conveyance. D-2 PHX 32753240lv4 8/27/2007 6. The facilities conveyed hereunder are all located within property owned by .......... or utility or other public easements dedicated or to be dedicated by plat or otherwise. IN WITNESS WHEREOF . .......... has caused this Conveyance to be executed and delivered this .......... day of ............... 200. . By .................................... By .................................... Title: .............................. D-3 PHX 327532401 v4 8/27/2007 STATE OF ss. COUNTY OF .......... This instrument was acknowledged before me on .............. 1 200.. by ............................. ; ............ I of ....................... an Arizona limited liability company, on behalf of said corporation. Notary Public ...................... ............. Typed/Printed Name of Notary [NOTARY SEAL] My Commission Expires: ............. D-4 PHX 327532401v4 8/27/2007 EXHIBIT I TO CONVEYANCE OF SEGMENT OF PROJECT (Insert description of ProjectlSegment) EXHIBIT I PHX 32753240lv4 8/27/2007 EXHIBIT E FORM OF DISCLOSURE STATE NT SAGUARO SPRINGS COM4UNITY FACILITIES DISTRICT DISCLOSURE STAMONT Saguaro Reserve, LLC, a Delaware limited liability company (the "Developer") , in conjunction with the Town of Marana, Arizona (the "Town") , has established a community facilities district ("CFD") at the development known as "Saguaro Springs." The CFD has financed and, in the future, will finance certain public infrastructure improvements, which will result in a property tax liability for each property owner of Saguaro Springs resulting from being in the CFD. BACKGROUND On September 30, 1988, the Arizona Community Facilities District Act became effective. This provision in State law was created to allow Arizona municipalities to form CFDs for the primary purpose of financ- ing the acquisition, construction, installation, operation and/or maintenance of public infrastructure improvements, including water and sewer improvements. HOW THE CFD WORKS On 1 2007, the Mayor and Council of the Town formed the CFD which includes all of the residential and commercial property in Saguaro Springs. An election was held on ........... 2007, at which time the owners of the property within the CFD voted to authorize up to $ of ad valo-rem tax bonds to be issued over time by the CFD to finance the acquisition or construction of water, sewer, road and park improvements. The improvements have been or will be dedicated to the Town after acquisition or construction of such public infrastructure by the CFD. The Town will operate and maintain such improvements. WHAT WILL BE FINANCED? The CFD has been established to finance up to $ in public infrastructure improvements within or benefiting Saguaro Springs including financing costs related to such improvements. The initial bond issue is expected to be approximately $ ........ 000. The proceeds of this bond issue is currently expected to be utilized to finance the engineering, design and construction of a portion of the .......... improvements for Saguaro Springs. In addition, it is anticipated that E-1 PHX 32753240lv4 8/27/2007 approximately $ ........... 000 in bonds will be issued over the next approximately .......... years for future phases of infrastructure at Saguaro Springs. Thereafter, any remaining bond authorization would be available for issuance to finance other improvements. AD VALOREM TAXES OF THE CFD General obligation bonds and the CFD's operation and maintenance expenses are paid from ad valorem taxes levied against all property within the CFD. Your share of general obligation bond payments and expenses are included as part of your regular Pima County property tax statement and are separately shown in addition to taxes levied by the Town of Florence and other political subdivisions. SPECIAL ASSESSMENTS OF THE CFD Special assessment bonds are paid from special assessment payments secured by an assessment lien on each benefited lot within a special assessment area. Special assessment areas are formed from time to time based on the public improvements being constructed or acquired with proceeds of the special assessment bonds. The amount of the special assessment liens may vary depending upon the size of the lot within the special assessment area, the benefit estimated to be received by each such lot, the cost of the public improvements to be acquired, and the financing terms of the applicable special assessment bonds. The special assessment payments as well as the applicable administration charges are anticipated to be collected through your regular Maricopa County property tax bill. BENEFITS TO RESIDENTS The bond issues by the CFD will benefit all residents within Saguaro Springs by providing public roadway, utility, drainage, park and recreation and other public infrastructure improvements. This benefit was taken into account by the Developer in connection with establishing the price of the lot on which your home is to be located. Each resident of the CFD will participate in the repayment of the bonds in the form of an additional property tax to the current property taxes assessed by other governmental entities. This added tax is currently deductible for purpose of calculating federal and state income taxes. PROPERTY OWNERS' TAX LIABILITY The obligation to retire the bonds will become the responsibility of any property owner in the CFD through the payment of property taxes collected by the Pima County Treasurer in addition to all other property tax payments. (PLEASE NOTE THAT AT THIS TIME, OTHER THAN GLADDEN FARMS COMMUNITY FACILITIES DISTRICT, NO OTHER AREA WITHIN THE BOUNDARIES OF THE TOWN IS SUBJECT TO A PROPERTY TAX LEVIED BY ANY OTHER COMMUNITY FACILITIES DISTRICT.) Beginning in fiscal year E-2 PHX 327532401 v4 8/27/2007 200 . the CFD levied a not to exceed $2.80 per $100.00 of secondary assessed valuation tax rate to provide for repayment of the bonds and the payment of certain administrative expenses associated therewith and to provide for the expenses of the CFD and of operation and maintaining the infrastructure it finances. Although the level of the tax rate is not limited by law, the tax rate of the CFD is not expected to exceed $2.80 per $100.00 of secondary assessed valuation for as long as the bonds are outstanding. The tax rate will be maintained initially at the $2.80 level by means of agreements with the Developer which require the Developer to provide for the difference above such $2.80 rate. (There can be no guarantee that the Developer will be able to make such payments in the future and, if it cannot, tax rates will be increased to provide for such repayment.) As growth of the tax base occurs within the CFD, it is anticipated that such payments from the Developer will no longer be necessary if debt service is covered by the $2.80 tax rate at which time the District may release the developers from such obligations. INITIAL FINANCING'S COST TO HOMEOWNER The District has Assessment Area") and/or acquisition of Parcel in formed a special assessment area (the "Special that includes Parcel for the construction of certain public improvements, i.e., construction The District has assessed Lot within the amount of $ (the "Assessment ). IMPACT OF ADDITIONAL CFD PROPERTY TAX The following shows the total annual District taxes including the District operational and maintenance tax, for repayment of expected District general obligation bonds as well as the anticipated special assessment obligation. Market Value of Residence(l) (A) Estimated Annual General Obligation and Expense Payment(2) (B) Estimated Annual Special Assessment Payment(3) (A) + (B) Estimated Tota Annual CFD Ta3 Payments(4) $250,000 - - - 275,000 - - - 300,000 - - - 325,000 - - - 350,000 - - - 375,000 400,000 Vnnt--nnf AA (1) Market value is not the same as full cash value as reported by the County Assessor, which is typically 85% of market value. E-3 PHX 32753240lv4 8/27/2007 (2) General obligation bond debt service and operations and maintenance expenses assuming a $2.80 increase in the ad valorem property tax rate per $100 of assessed value. The estimated annual additional tax liability will vary depending upon the final terms of the General Obligation Bonds. (3) All lots located within the boundaries of t e District are anticipated to have a special assessment lien. (4) All of the taxes and charges described above arr in addition to any taxes, fees and charges imposed by the -Town of Florence or other political subdivisions and are in addition to any assessments or fees imposed by any homeowners association. *Assumptions: A. Assumes residential property assessment ratio wil? 1 remain at 10%. B. Tax amount is computed by multiplying the tax ?ate per $100 of assessed value by full cash value times the assessment ratio. Additional information regarding the description of infrastructure improvements to be financed by the CFD, bond issue public disclosure documents and other documents and agreements (including a copy of this Disclosure Statement) are available for review in the Town of Marana Town Clerk's office. Your signature below acknowledges that you have read. this disclosure document at the time you made your decision to purchase property at Saguaro Springs and you signed your purchase contract and that you understand the property you are purchasing will be taxed to pay the CFD bonds described above. .............................. Home Buye r (s) Signature/Date Home Buyer(s) Signature/Date .............................. Home Buyer(s)*P4nted*Name*(s)' ..... ........ ----?a .. rcei No . ..... Lot No . ..... E-4 PHX 327532401 v4 8/27/2007