HomeMy WebLinkAboutResolution 97-082 tolling agreement with CMID and CWUATOLLING AGREEMENT BETWEEN THE TOWN.OF MARANA, CORTARt~ MARANA
IRRIGATION DISTRICT AND CORTARO WATER USERS ASSOCIATION
This Tolling Agreement, effective>Apri! 14, 2009', is between and among Town of C~~:
Marana, a political subdivision of the State of Arizona {"Marana"); Cortaro Marana Irrigation District, ~/`
Pima County, Arizona, a political subdivision of the State of Arizona {°CMiD"y and its agent, the. -
Cortaro Water Users Association, an Arizona corporation; {hereinafter both are collectively referred. to- ;"
as "Cortaro"). The fioregoing parties are collectively referred to as the "Parties".
ftEC17ALS
1, On or about September 16, 1997, the Parties executed an intergovernmental
agreement.{"1GA") he intent and purpose of which was to maximize water management efficiencies
and avoid ..unnecessary. duplication of municipalwater service within Cortaro's boundaries and within
Marana's service area by, among other things, consolidating ownetsh'ip interest in municipal water
facilities and defining on-going operational, management, water production and sales, distribution.
and treatment functions and responsibilities for the provision of municipal water service among. the.
Parties, and to create a trust for the control of wells belonging to Cortaro and Marana through the
1 GA.
2,. Various disputes between the Parties over IGA provisions have led to the
proposal to cancel the IGA khrough an iGA Cancellation;Agreement,
3. Notwithstanding the drafting of the IGA Cancellation Agreement, new
disputes have arisen regarding the interpretation of provisions of this later agreementand each party
has alleged breaches by the other .party.
4. In~-~orderto resolve all the disputes without resorting to judicial proceedings,
the:.Pattes have reached a tentative agreement.
5. The tentative agreement will be rnernorialized in writing. Given the good faifh
of the Parties to memorialize the tentative agreement and to avoid any legal action, Cortaro and
Marana agree';#o toll and to waive until May 3Q, 2009, any filing. deadlines, statutes of limitation or
equitable defenses available to them which may be applicable. to the filing of a' claim ar allegation
pertaining to`the alleged breaches of the IGA.
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MARANA
/I \
TOWN OF MARANA
ADMI~U7y~qT~V~ S~(~,VICES
1 1 U z5
VIA HAND DELIVERY
Mr. Dan Post, Chairman
CMID/CWUA Board
12253 W. Grier Road
Marana AZ 85653
Re: Prompt Negotiation of Replacement MaranalCMID IGA
Dear Mr. Post:
This letter confirms the Town of Marana's intent to work diligently and in good faith to
work with you and the CMID negotiating team to substantially complete negotiations by
September 15, 2008 on a new IGA to replace the existing 1997 Marana/CMID IGA. The
Town of Marana's negotiating team will work with CMID's negotiating team to develop a new
IGA that serves the long-term best interests of both entities.
The Town of Marana understands and acknowledges that CMID is relying on this letter
in not moving forward to begin the IGA termination process as outlined in the 1997 IGA.
If CMID is willing to join in this commitment to work diligently and in good faith to
develop the replacement IGA, please sign where indicated below.
Do not hesitate to contact me if you would like to discuss this matter directly.
Sincerely,
~
,~8r~~
G ert avidson
Town Manager ~ ccepte and reed:
Dan Post, Chairman
CMID/CWUA Board
{FC0476.DOC
11555 W. CIVIC CENTER DRIVE, BLDG. A3 ~ MARANA, ARIZONA 85653-7006 ~ TELEPHONE: (520) 382-1900 ~ FAX: 382-1902
MARANA RESOLUTION NO. 97-82
A RESOLUTION OF THE T4WN COUNCII. OF TI-~ TOWN OF MARANA, ARTZON~
AUTHORIZII~TG TfiE TOWN TU ENTER INTO AN IN?ERGOV~iRN1V~NTAL ~j
WITH THE CORTARO-1~~tARANA IRRIGATION DISTRICT F4R THE P[7RCHASE 4F A
MUNiCIPAL WATER SYSTEM, AND D~CL,ARIl~T~ AN EMERGENCY.
VV~RIEAS, the Town of Mara~na, the Cortaro-Marana Irrigation District and
the Cortaro Water Users Asso~,yatian ~"CWUA"~ have prtvious
yl adopted a Mem~ of
Understandin$ regarding the Town's purchsse of the C1VIII'1 CWUA mumc~pai water system; and
WHEREAS, pisrsuant to the adoptioa of Marana Resoiutian 97-54 on June 17, 199'1, the
Town approved and opened an escrow accoum, and has sincx depo 'srted fimds urto the a~count, ;
toward the purchase of the Cl~ CWUA municipa~ w$ter system pendu~g a final agreaneat bemg
reached between the parties regarding the purchase; and
VVIEIER~AS, the Town and C11~IIU CWUA have now finali~ed the attached Intergovarnmental
A,greemeirt regarding the Tovm's purchase of the Cl~} CWUA mvnippal water system, and it is
in the best interests ofthe atiuns ofthe Town that the Town purchase the C1VIID CWUA municipal
water system to give its citizens access to a n;liabte water source. i
NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Town of ~ ;
Marana, Arizona, as follows:
Sectian 1. That the Mayor and Cauncil hereby authorize the Mayor to acecute the '
Intergovernmcntal Agecmern for the purchase of the C1V~ CWUA municip~l water system, i
attached hereto as Exhibit "A"
Section 2. That prior to executing the Intergovernmernal Agreement, the Town Attomey shall
revierov alt ~x2v'bits to the ageement to detennine whether or not such exhibits conform to the terms ~
of the agreement, and all ~'bits shall have been reviewed and approved by the Town Manager, !
Section 3. An emecgency is hereby declared to exist affecting the health, safety, and welfare af
the people of Marana, and tlus Resolution sha2t become immediately effective. ,
PASSED ArID ADUPTID by the Mayor and Council of the Town of Mara~na, Arizona, t~is !
19'd day of 97. ~ '
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A r ST: , ayor ORA
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~ San
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ROVED AS TO FO . P
~
~'"'~aniel J. Hochuli ~
~ Town Attorney
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CAPTION HEADING: INTERGOVERNMENTAL AGREEMENT
E~638 ~55~3
l~r)
INTERGOVERNMENTAL AGREEMENT
BETWEEN
THE TOWN OF MARANA
AND
THE CORTARO-MARANA IRRIGATION DISTRICT AND
THE CORTARO WATER USERS' ASSOCIATION
PIMA COUNTY, ARIZONA
I~~~~ ~55~
INDEX
PART ONE
1.1 PARTIES . . . . . . . . . . . . . . . . . . . . . 1
1.2 EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . 1
1.3 RECITALS . . . . . . . . . . . . . . . . . . . . 1
1.4 DEFINITIONS, ACRONYMS . . . . . . . . . . . . . . . . 3
1.4.1 Agreement . . . . . . . . . . . . . . . . . 3
1.4.2 Agricultural Water Service . . . . . . . . . 3
1.4.3 Alternate . . . . . . . . . . . . . . . . . 4
1.4.4 Arizona Department of Environmental
Quality/ADEQ . . . . . . . . . . . . . . . 4
1.4.5 Arizona Department of Water Resources/ADWR . 4
1.4.6 Arizona Water Banking Authority/AWBA 4
1.4.7 Assessment(s) . . . . . . . . . . . . . . . 4
1.4.8 Asset Sales Agreement . . . . . . . . . . . 4
1.4.9 Assured Water Supply/AWS . . . . . . . . . . 4
1.4.10 Authorized Representative . . . . . . . . . 4
1.4.11 Central Arizona Groundwater
Replenishment District/CAGRD . . . . . . 4
1.4.12 Central A~izona Water Conservation
District/CAWCD . . . . . . . . . . . . . . 4
1.4.13 Central Arizona Project/CAP . . . . . . . . 4
" 1.4.14 Conditions of Service . . . . . . . . . 4
1.4.15 Cortaro-Marana Irrigation District/CMID 4
1.4.16 Cortaro Water Users' Association 5
1.4.17 Cost of Service Principles . . . . . . . . . 5
1.4.18 District . . . . . . . . . . . . . . . . . 5
1.4.19 Municipal Water Systems . . . . . . . . . . 5
1.4.20 Effluent . . . . . . . . . . . . . . . . 5
1.4.21 Environmental Protection Agency/EPA 5
1.4.22 Gallons Per Capita Day/GPCD . . . . . . . . 5
1.4.23 Joint Planning Area . . . . . . . . . . . . 5
1.4.24 Municipal Water Service . . . . . . . . . . 5
1.4.25 Party, Parties . . . . . . . . . . . . . . . 5
1.4.26 Potable . . . . . . . . . . . . . . . . . 6
1.4.27 Non-Discriminatory . . . . . . . . . . . . 6
1.4.28 Non-Potable, Non-Irrigation . . . . . . . . 6
1.4.29 Non-Taxable Income . . . . . . . . . . . . 6
1.4.30 Operating Committee/Committee . . . . . . . 6
1.4.31 Reclaimed Water . . . . . . . . . . . . . . 6
1. 4 . 3 2 Town . . . . . . . . . . . . . . . . . . 6
1.4.33 Town Service Area . . . . . . . . . . . . . 6
1.4.34 Town Water Utility/Town Water System 6
1.4.35 Trust . . . . . . . . . . . . . . . . . 6
1.4.36 Water Production . . . . . . . . . . . . . . 6
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PART TWO - PURCHASE, TRANSFER,~ POSSESSION
2.1 TOWN PURCHASE OF DISTRICT MUNICIPAL WATER SYSTEMS 7
2.1.1 Encumbrances . . . . . . . . . . . . . . . 7
2.1.2 Operating Committee Facilitates Transfer 8
2.2 TRUST . . . . . . . . . . . . . . . . . . . . 8
2.2.1 Transfer of Wells By District 8
2.2.2 Transfer of Wells By Town . . . . . . . . . 8
2.2.3 District Deed Restrictions . . . . . . . . . 9
2.2.4 Title At Termination . . . . . . . . . . . . 9
2.2.5 Reversion In Case of Breach Or
Unenforceability . . . . . . . . . . . . . 9
2.3 TRANSFER OF DISTRICT CAP ALLOCATION . . . . . . . . . 10
PART THREE - WATER SERVICE
3.1 MUNICIPAL WATER SERVICE WITHIN DISTRICT,
NON-DISCRIMINATION . . . . . . . . . . . . . . . 11
3.1.1 Definition of Non-Discriminatory
Terms and Conditions . . . . . . . . . . . li
3.1.2 Town Charges For Water Service
Outside of District . . . . . . . . . . . . 12
3.1.3 Areas Served By Other Water
Providers Within The District . 12
3.1.4 Town and District Service Obligations 12
3.1.5 District Appropriative (Surface)
Water Right . . . . . . . . . . . . . . . . 12
3.2 NON-P(YPABLE, NON-IRRIGATION WATER SII2VICE 13
3.2.1 Non-Potable, Non-Irrigation Service Defined 13
3.2.2 Cooperating To Meet ADWR
Conservation Requirements . . . . . . . . . 13
3.2.3 District's Obligations To Serve
District Landowners (Shareholders) . . . . 14
3.2.4 Residential Landscape Irrigation 14
3.3 AGRICULTURAL WATER SERVICE . . . . . . . . . . . . . 14
3.4 EFFLUENT, RECLAIMI3D WATER . . . . . . . . . . . . . . 14
PART FOUR - WATER PRODUCTION CfLa?12GES
4.1 WATER PRODUCTION . . . . . . . . . . . . . . . . . 14
4.2 WATffi2 PRODUCTION RATES . . . . . . . . . . . . . . . 15
4.2.1 Initial Rates . . . . . . . . . . . . . 15
4.2.2 Rates For Water Used Outside of District . 15
4.2.3 Annual Adjustment of Wholesale Water Rates 15
4.2.4 Annual Adjustment For Amount of Water
Delivered Outside District . . . . . . . . 16
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4.2.5 Sales and Other Taxes and Governmental
Assessments . . . . . . . . . . . . . . . . 16
4.2.6 Coding of Customer Accounts . . . . . . . . 16
4.3 SYSTEMS ACQUIRED BY TOWN AFTER EFFECTIVE DATE 16
PART FIVE - •WFT_T.S, WELL-SITES
5.1 OPERATION & MAINTENANCE (O&M) RESPONSIBILITY DEFINED 17
5.1.1 District Responsibility . . . . . . . . . . 17
5.1.2 Town Responsibility . . . . . . . . . . . . 17
5.1.3 Division Point . . . . . . . . . . . . . 17
5.1.4 Joint Responsibility . . . . . . . . . . . 17
5.1.5 Joint Use Well-Sites . . . . . . . . . . . . 18
5.2 IRRIGATION WELLS AS EMERGFNCY BACKUP SUPPLY 18
5.3 WELL REPLACEMENT, NEW WELLS, UPGRADES, ADDITIONS 18
5.4 TRANSFER OF OTHER DISTRICT WELL-SITES TO TOWN 19
5.5 POSSIBLE FUTURE TRANSFER OF DISTRICT ASSETS TO
TOWN, CONTINUATION OF IRRIGATION WATER SII2VICE 19
PART SIX - METffi2ING, BILLING, COMMITTEE, REPRESENTATIVES
6.1 ELECTRIC METERING, PAYIKENT OF ELECTRIC BILLS 20
6.1.1 Kilowatt-Hour Meters, Estimating
Electrical Energy Use When 1Keters Are
Not Operational, Resolvinq Discrepancies
in Electric Utility and Kilowatt-Hour
Meter Usage . . . . . . . . . . . . . . . . 20
6.2 WATER METERING . . . . . . . . . . . . . . . . . . . 21
6.3 METER ACCESS, INSPECTION, READING . . . . . . . . . . 21
6.4 BILLINGS . . . . . . . . . . . . . . . . . . . . . . 21
6.4.1 Refusal to Pay . . . . . . . . . . . . . . 21
6.5 TOWN WATER UTILITY SELF-SUSTAINING; REIMBURSII~SENT
FOR TAXES ON DISTRICT AGRICULTURAL LANDS 22
6.6 OPERATING COMMITTEE . . . . . . . . . . . . . . . . . 22
6.7 AUTHORIZED REPRESENTATIVES, ALTERNATES . . . . . . . 24
6.8 CUSTOMER DEPOSITS . . . . . . . . . . . . . . . . . . 24
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PART SEVEN - WATER OUALITY~ AWS
7.1 WATER QUALITY . . . . . . . . . . . . . . . . . . . . 25
7.1.1 Responsibility For Expense of
Resolving Water Quality Issues 26
7.2 WATER TESTING, MONITORING, COMPLIANCE . . . . . . . . 26
7.3 ASSURED WATER SUPPLY, MANAGEMENT OF AQUIFER 26
FART EIGHT - WATER, ELECTRICITY, COOPERATICIN
8.1 DISTRICT SURFACE WATER ALI,OCATION . . . . . . . . . . 27
8.2 RETIRED IGR~S/TYPE I RIGHTS . . . . . . . . . . . . . 28
8.3 ELECTRICITY/ELECTRIC SUPPLY . . . . . . . . . . . . . 28
8.4 COOPERATION, RESOURCE PROTECTION . . . . . . . . . 29
8.4.1 Electricity . . . . . . . . . . . . . . . • 29
8.4.2 Water Rights . . . . . . . . . . . . . • 29
8.4.3 Recharge, Replenishment, Credits 29
PART NINE - RIGHT OF ACCESS; MISCETTANEOUS
PRQPERTY; FIBER OPTICS AND El~PLOYEES
9.1 RIGHT OF ACCESS . . . . . . . . . . . . . . . . . . . 30
9.2 LEASE OF PROPII2TY . . . . . . . . . . . . . . . . . . 30
9.3 DISTRICT PIPELINE UNDER I-10 . . . . . . . . . . . . 31
9-4 RELOCATION OF STANDPIPE . . . . . . . . . . . . . . . 31
9.5 FIBER OPTICS . . . . . . . . . . . . . . . . . . . . 31
9.6 DISTRICT EIYIPLQyEES AFFECTED BY THIS AGREEMENT 31
PART TEN - TERM RATIFICATION RECORDING, NOTICE
10.1 TERM OF THIS AGREEMENT . . . . . . . . . . . . . . . 32
10.2 CANCELLATION . . . . . . . . . . . . . . . . . . . . 32
10 . 3 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . 3 2
10 . 4 RECORDING . . . . . . . . . . . . . . . . . . . . . . 3 2
10.5 NOTICE . . . . . . . . . . . . . . . . . • • - - • 33
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PART ELEVEN - INSURANCE
11.1 INSURANCE . . . . . . . . . . . . . . . . . . . . . . 3 3
PART TWELVE - MISCELA1dE0US
12.1 LEGAL AITTHORITY . . . . . . . . . . . . . . . . . . . 34
12.2 STATE AND FEDERAL LAW REQUIREI~IENTS . . . . . . . . . 34
12.3 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . 35
12.4 LEGAI, JURISDICTION . . . . . . . . . . . . . . . . . 35
12.5 TIME OF ESSENCE . . . . . . . . . . . . . . . . . . . 35
12.6 WAIVER . . . . . . . . . . . . . . . . . . . . . . 35
12.? BINDING EFFECT . . . . . . . . . . . . . . . . . . . 35
12.8 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . 35
12 . 9 SURVIVAL . . . . . . . . . . . . . . . . . . . . . . 35
12.10 SEVEI2ABILITY . . . . . . . . . . . . . . . . . . . . 35
12.11 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . 36
12.12 ENFORCEMENT . . . . . . . . . . . . . . . . . . . . . 36
12.13 AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . 36
12.14 ADDITIONAL DOCUMLNTS AND ACTS . . . . . . . . . . . . 36
12.15 USE OF PURCHASE PRICE . . . . . . . . . . . . . . . . 36
12.16 RESOLiTTION OF DISPtJTES . . . . . . . . . . . . . . . 36
12.17 DEFAULT AND BREACH . . . . . . . . . . . . . . . . . 36
12.18 COVENANTS NOT TO EXECITTE . . . . . . . . . . . . . . 37
12.19 THIRD PARTY CLAIMS . . . . . . . . . . . . . . . . . 37
12.20 LIABILITY FOR WILLFUL ACTION . . . . . . . . . . . . 37
12.21 LIMITATION OF LIABILITY . . . . . . . . . . . . . 3g
12.21.1 Limit on Liability . . . . . . . . . . . . 38
12.21.2 Time for Filing Claims . . , . , . , . . , 38
12.21.3 Impact on Insurance . . . . . . . . . . . . 38
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12.22 WILLFUL ACTION - DEFINED . . . . . . . . . . . . . . 38
12.23 UNCONTROLI.ABLE FORCE . . . . . . . . . . . . . . . . 39
12.24 NO THIRD PARTY RIGHTS - NO DEDICATION OF FACILITIES . 39
12.25 ASSIGNMENTS . . . . . . . . . . . . . . . . . . . . . 40
12.26 INFORMATION EXCHANGE . . . . . . . . . . . . . . . . 40
E X H I B I T S
Exhibit Description
1.4.18 Map of "D1StZ'1Ct"
2.1 Asset Sales Agreement
2.2 Trust Agreement
2.2.1 List of District Wells Transferring to Trust
2.2.2 List of Town Wells Transferring to Trust
3.1.1 Town's Conditions of Service
4.2.3 Adjustments to Water Production Rates
5.1.5 Facilities, Equipment and Operational Responsibility at
Joint Use Well-sites
5.3 Depreciation/Amortization Factor
5.4 Method of Valuing Agricultural Wells Subsequently
Acquired by Town
6.1 Accounting and Billing
9.1 Joint Use Rights of Way and Easements
185\agmta\mnrana.iga\index.iga
VZ
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II~TERGOVERNMENTAL A REEMENT
BETWEEN
THE TOWN OF MARA~
AND
THE CORTARO-MARANA IRRIGATION DI TRICT AND
THE CORTARO WATER ER ' A OCIATION
PIMA COUNTY, ARIZONA
PART ONE
~_1 ~ARTIES:
This Intergovemmental Agreement ("Agreement") is between:
The TOWN OF MARANA, a municipal corporation of the State of
Arizona, hereinafter referred to as ('Town") and;
The CORTARO-MARANA I1ZR GATION DISTRICT, an Irrigation
District and political sub-division of the State of Arizona ("CMID"), and the
~ORTARO WATER USER ' A O IATION, an Arizona non-profit
corporation ("Association"), hereinafter collectively refened to as ("Distric#").
Town and District are hereinafter collectively referred to as the
("Parties") to this Agreement.
~ ~FFECTIVE DATE:
This Agreement is dated this ~ day of , 1997, and shall become
effective when fully executed and ratified as provide herein and recorded with the
office of the Pima County Recorder, Tucson, Arizona. Every effort shall be made to
have the Effecdve Date coincide with a regular District customer billing cycle which
occurs around the twentieth of the month.
1_..~ ~tECITAIS:
The following recitals represent general principles agreed upon by the Parties.
These principles are the basis for, and are incorporated into, the specific contractual
covenants which follow. Terms used in the recitals shall have the meaning defined in
this Agreement.
1.3 _ 1 The Parties recognize that their respective rights to provide water service
and their respective service areas overlap. Through this Agreement the Parties desire
and intend to maximize efficiencies and avoid unnecessary duplication of municipal
1
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water service within the District and within the Town Service Area by consolidating
ownership interest in municipal water facilities and defining on-going operational,
management, water production, distribution and treatment functions and
responsibilities for the provision of municipal water service among the Parties with
each Party having separate and distinct boundaries, purposes and responsibilities in
continuing to supply and manage water resources within the area of Town and District.
1"3 • 2 CMID and Association were formed for the primary purpose of managing
the acquisition and delivery of water and to provide water first for irrigation and,
secondarily, for municipal and other purposes to lands within the District. The
District and its predecessors have acted to further these purposes since at least 1919.
1.3.3 The District has rights to water resources and currently provides both
agricultural water service and municipal water service to lands and persons in the
District. The District desires, in accordance with this Agreement, to transfer to Town
its municipal water systems and its long-standing obligations to its lands, members
and/or the public to furnish them with municipal water service.
1.3.4 Town is authorized to own and operate a municipal water utility and
provide municipal water service. Town desires, in accordance with this Agreement, to
acquire the District's municipal water systems and to assume the District's long-
standing obligations to its lands, members and/or the public to furnish them with
municipal water service by incorporating them into the Town Water Utility.
1.3. S On the Effective Date of this Agreement and consistent herewith, the
District will a) continue as the sole provider of agricultural water service within the
District, b) produce the water necessary to meet the municipal water service needs of
the lands, members and/or the public within the District, c) produce the water
necessary to meet the municipal water service needs of other areas and persons within
the Town Service Area as mutually agreed by the Parties, d) continue to be a provider
of municipal water service and non-potable, non-irrigation water service to the extent
permitted by this Agreement, such as where Town fails to meet the District's long-
standing obligations to its lands, members and/or the public to furnish municipal water
within the District and e) transfer certain wells into the Trust.
1.3.6 On the Effective Date of this Agreement and consistent herewith, the
Town will a) have the primary obligation of providing municipal water service within
the Town's Service Area which shall encompass the District, b) assume the District's
long-standing obligations to its lands, members and/or public to fumish them with
municipal water service by incorporating them into the Town Water Utility, c) enter
into a long-term arrangement to have District produce the water necessary to meet the
municipal water service needs of the lands, members and/or the public within the
District and sach other areas and persons within the Town Service Area as mutually
agreed by the Parties and d) transfer certain wells into the Trust.
2
lu~su ~5~7
1.3 • 7 Through the mechanism of this Agreement, the intent is to provide a
vehicle for the orderly transfer of ownership of the District's municipal water business
to Town. Additionally, it is intended through the Trust mechanism and the District's
production of water for the Town pursuant to the terms of this Agreement in amounts
that approximate no less than the annual municipal water costomer demand within the
District, that such transfer provide District with a source of revenue to assist it in
fulfilling its primary function and avoid conflict with the DistricYs 50 gpm deed
restriction. It is further intended that the water resources made available to Town by
District under this Agreement shall be prioridzed for the benefit of District lands and
members.
1.3 • g It is a purpose of this Agreement and each Party to allow the District
lands to remain in agriculture and for the owners of lands within the District to
continue to operate their farms in accordance with generally recognized farm practices
despite annexation of the District lands into Town aad urbanizadon of the surrounding
area; and through operation of this Agreement, to allvw the District and the
landowners within the District an opportunity to preserve and maintain a sound
financial basis for District operations so irrigation of agricultural lands within the
District remain economically viable under the water law of Arizona and otherwise
during an anticip~ted period of transition from primarily an agricoltural economy to an
increasingly predominate urban economy. The DistricYs ultimate purpose is to
maintain competitive agricultural water rates during this transition period. It is in a
spirit of fulfillment and accomplishment of this purpose that binds the Parties in
mutual agreement to a long-term relationship as partners in the management of the
areas water resources.
1.3.9 It is a further purpose of this Agreement to benefit Town by allowing the
consolidation of existing water systems to achieve economies of scale and efficiency.
1_ 4 DEFINITIONS* AC~tONYMS:
Notwithstanding a term's similarity to a term set forth in the 1980 Groundwater
Management Act or any other statute, rule, regulation or ordinance, the following
words and phrases shall have the following defined meanings for the purpose of this
Agreement:
1.4.1 Agreement - This Intergovemmental Agreement, including all exhibits,
which by this reference are incorporated herein.
1_4.2 Agricultural Water Service - Delivery of water from any source to a
parcel of land for the following purposes: producing plants for sale or human
consumption; use as feed for livestock or poultry; service to grazing pastures or
orchards; reservoirs related to farming or ranching, and such service for flood-type
imgation of residential lawas.
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1.4.3 Altemate - A person duly appointed by a Party pwsuant to Section 6.7 of
this Agreement.
1.4.4 Arizona Dep~rtment of Environmental uali~y / ADEQ - The agency of
the State of Arizona established by A.R.S. § 49-102.
1.4.5 Arizona De~~rt~ent of Water Recource / ADWR - The agency of the
State of Arizona established by A.R.S. § 45-102.
1.4.6 Arizona Water Banking ALthoritv AWBA - The agency of the State of
Arizona established by A.R.S. § 45-242.1.
1.4.7 Assessment( 1- The amount District landowners/members must pay
annually as a precondition to receive water from District.
1-4,.$ Asse~ Sales A~reement - The agreement for sale of District assets to
Town attached hereto as EXHIBIT "2.1".
1.4.9 Assured Water uF~~ ! AWS - As defined in A.R.S. ~ 45-576, and
laws amendatory and supplemental thereto.
1.4.10 Authorized Re~resentative - A person appointed by a Party pursuant to
Secrion 6.7 of this Agreement.
1.4.11 Central Arizona roundwater Replenishment Dic 'ct / CAGRD - The
CAWCD performing its replenishment funcdons pursuant to Article 4, Chapter 22,
Tit1e 48 of the Arizona Revised Statutes.
1.4.12 Central Arizona Wa Pr Concervation District / CAWCD - A t~-
levying public improvement disbrict and municipal corporadon of the State of Arizona
established pursuant to A.R.S. 48-3701 et seq.
1.4.13 Central Arizona Project I CAP - The project constructed by the United
States of America, Department of Interior and operated by the Central Arizona Water
Conservation District to bring the waters of the Colorado River to Pima, Pinal and
Maricopa Counties.
1.4.14 ('onditions of Service - Condidon under which municipal water service
is provided by Town. The current conditions of Service are attached hereto as
EXHIBIT "3.1.1
1~.4 ~ Cortaro-Marana Irri~ation District / MID - An Irrigation District
formed pursuant to A.R.S. 48-2901 et seq. and a political subdivision of the State of
Arizona.
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1.4.16 Cortaro Water Users' Association - A non-profit corporadon of the
State of Arizona and designated agent of the Cortaro-Marana Imgation District.
1.4.17 ~ost of Service Princi~les - Principles under which rates for municipal
water service are established and charges are made on a non-discriminatory basis and
in direct proportion to the cost of securing, developing and delivering water to
customers of Town Water System.
1.4.1 g District - The term used to refer to the combinadon of the Corta.ro-
Marana Irrigation District, Pima County, Arizona and the Cortaro Water Users'
Association, as well as to a11 lands within the exterior boundaries of CMID, the
Association, plus certain adjacent land where a Certificate of Convenience and
Necessity ~vas purchased by the District in July of 1970, all as more fully depicted on
the Map attached hereto as EXHIBIT "1_4.18".
1.4.19 Muni i~a1 Water Svstems - The entirety of the water facilities,
equipment and business enterprise involved in the production, purchase, treatment,
storage and delivery of water dedicated to providing municipal water service, with or
without treatment.
1.4.20 E n- Wastewater which has received secondary treatment,
including recharge credits derived from effluent.
1.4.21 Environmental Protection A..gency / EPA - An agency of the Federal
government charged with the implementadon and enforcement of Federal
environmental law, including water quality sta.ndards.
1.4.22 Gallons Per Canita Dav / GPCD - A unit of ineasure that describes the
amount of water consumed by one person on a daily basis (gallons of water consumed
per person per day).
1.4.23 Joint Planning Area - The lands located both within the District and
Town, and the water resources available to meet the present and future water demands
of such lands
1.4.24 Municipal Water Service - Potable water provided to residential,
commercial and industrial water customers, not for resale, meeting all applicable
govemmental primaty standards and deemed of sufficient quality for human
consumption.
1.4.25 Parties - A Party to this Agreement is either Town or the
District and includes their officers, directors, members of its goveming body,
employees, agents, authorized representatives, successors and assigns. Parties refers
to Town and District in combination.
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1.4.26 P le - Refers to water meeting all applicable primary standards to
be deemed of sufficient quality for human consumption.
1.4.27 Non-Discriminator~ - Rates, conditions and terms of municipal water
service which do not unfairly disdnguish among customers within Town Service Area
except as may be provided wit6in this Agreement.
1.4.28 Non-Potable. Non-Irrigation - Non-agricultural water service that is
not represented as meeting the requirements of the Safe Drinking Water Act.
1.4.29 Non-Taxable Income - The income received which is not subject to
taxation by the United States of America, the State of Arizona or any political
subdivision or agency thereof.
1.4.30 O~eradn,g Committee / Committee - The Committee formed by Town
and District pursuant to Section 6.6 of this Agreement to carry out the provisions of
this Agreement, monitor the performance of the Parties, to undertake to joindy
develop, enhance, protect and defend the water resources within and available to the
District and Town for use in the Joint Planning Area and to work to resolve any
unanticipated issues to the mutual satisfaction of Town and District_
1.4.31 Reclaimed Water - Wastewater which has received a minimum of post-
secondary treatment, including the filtration received from being recharged.
4 2 Town - Town of Marana, a municipal corporation of the State of
Arizona.
1.4.33 Town Service Area - The areas in which Town is providing, is legally
obligated to provide or has voluntarily assumed the responsibility of providing
municipal water service area, including the area of the District as depicted on the Map
attached hereto as EXHIBIT "1.4.18" regardless whether such area is recognized as
Town's service area by ADWR.
1 4 4 Town Water Utility / Town Water Svctem - The municipal water utility
either owned, leased or controlled by Town, in its entirety.
1.4.35 Trust - The entity created pursuant to Secdon 2.2 of this Agreement.
1.4.36 Water Production - The operation and maintenance of wells to produce
water for distribution and use.
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PART TWO - PURCHASE~,TRANSFER, POSSESSION
2
1 TOWN PURCHASE OF DISTRICT MUNICIPAL WATER SYSTEMS:
In accordance with the terms of this Agreement, and in consideration of
payment of the sum of 5600,000 cash and a long-term contract to produce the water
necessary to meet the Town's municipal water service needs, District sells and
transfers to Town all District municipal water systems described in the Asset Sales
Agreement attached hereto as EXHIBIT "2.1 " upon the terms and conditions set forth
in this Agreement and in fiXHIBIT "2.1 A Bill of Sale sha11 accompany the transfer
of District domesdc water systems to Town upon execution of this Agreement. All
District municipal water systems transfened to Town are accepted by Town in "AS
IS" condition.
Upon the Effective Date of this Ageement, and Closing of the Asset Sales
Agreement, Town shall then own and be responsible for maintaining and operating all
municipal water systems transferred herein (subject to this Agreement and the Trust)
aad Town takes control of the District municipal water service area, has sole rate-
making authority and assumes primary responsibility to provide municipal water
service within the Town's Service Area, including the District. District shall have a
security interest upon transfer in existing accounts receivable undl fully collected and
received by District.
1 1 Encombrances: Town and District shall take or suffer no action, or allow
themselves to be obligated in any way which would alter the other's priority interest in
the municipal water systems and facilities transfened herein or hereinafter placed in
Trust in accordance with this Agreement, until such time as the terms of this
Agreement have been fulfilled. The Trust mechanism set forth in Section 2.2 is
designed to eliminate, to the maximum extent possible, limitations on Town's ability
to utilize the well-sites transferred to the Trust as security for raising capital for water
system improvements. Concerning any well-site used solely for delivery of service to
Town and transfened to the Trust by District pursuant to this Agreement, except for
debt of any nature existing at the time of execution of this Agreement on behalf of
Town, neither Town nor District shall thereafter sell, assign or convey any right, tide
or interest in or to the same without fust securing the written consent of the other
Party hereto; such consent shall not be withheld if the transferee, creditor or lender
agrees to abide by the terms and conditions of this Agreement and recognizes the
continued right of Town to receive water delivery from the Trust wells and the
Parties' right to operate well-site equipment and facilities as herein agreed. There
shall be no limits on the ability of the Town to pledge wells transfened to the Trust by
Town, pursuaat to this Agreement, for purposes of financing the Town's municipal
water system_
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2.1.2 ~g Committee Facilitates Transfer•
The Operating Committee shall meet no later than the Effecdve Date of this
Agreement to organize and supervise the transfer of District municipal water systems
to Town in accordance with this Agreement. The Operating Committee shall meet no
less than weekly until the transfer is complete (excluding the transfer of District CAP
allocation, AWS designation or other matters requiring third party approval). The
Operating Committee shall supervise and oversee the collection and payment of
District municipal water system accounts payable and accounts receivable until such
time as District has received all customer payments due District and District has made
full payment on all accounts payable for which District is responsible. The Operating
Committee shall designate sufficient numbers of Town and District personnel to
accomplish the transition in the shortest possible period of time and arrange for any
necessary training of Town employees (i.e., billing procedures, operation of
equipment and facilities, meter reading, any other training needs).
2~ TRUST:
Not later than execution of this Agreement, the Parties shall execute the Trust
Agreement attached hereto as EXHIBIT 2.2 for the purpose of transfemng designated
wells thereto for the benefit of Town and District and to be operated and maintained
by District.
2_2.1 Traosfer Of Wells By '"ct•
On the Effective Date of this Agreement, the District shall transfer to the Trust
five (5) District water wells more fully described on EXHIBIT "2.2.1 " attached
hereto. All such well-sites, equipment and facilities shall be accepted into the Trust in
"AS IS" condition. In accordance with the Trust Agreement attached hereto as
EXHIBIT "2.2", District, as Trustee, shall hold and operate the wells in the Trust for
the benefit of Town and District as Beneficiaries of the Trust. Town shall have the
obligation to take or pay for the production of water from the Trust wells in
accordance with Part Four hereof.
2.2.2 ~,~fer Of Wells By Town-
On the Effective Date of this Agreement, certain municipal water well-sites
currently owned by Town which are located within the District shall be transfened to
the Trust and thereafter, until termination of this Agreement, including any extensions
thereof, District shall operate the wells at these well-sites in the same manner as other
Trust wells. EXHIBIT "2.2.2" sets forth the well-sites and all equipment and
facilities to be transfened on the Effective Date. Any future municipal water well-
sites acquired or controlled by Town within the District, whether from the District,
developers or otherwise, shall likewise be placed in the Trust. All such well-sites,
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equipment and facilities shall be accepted into the Trust in "AS IS" condition. In
consideradon of the transfer of such wells to the Trust, District agrees to utilize the
lowest cost electric power supplies available to the District after providing water to its
primary uses, and to operate the wells as Trust wells as defined herein. Town may
elect to operate and maintain the Picture Rock well after it is placed in the Trust for
use at the Picture Rock Subdivision only, consisting of not more than
residential lots. In such case, no fees would be owed to District for water produced
from the Picture Rock well pwsuant to PART FOUR hereof.
2.2.3 District Deed Restrictions:
One of the purposes of the Trust is to eliminate legal conflict between Town
aad Disirict arising from the Deed Resirictions in favor of District which restrict the
right of landowners within the District from drilling, owning or utilizing non-Dislrict
wells larger than 50 gpm. In the event this Agreement is terminated for any reason,
the Parties agree that either Party may submit the legal dispute to a court of competent
jurisdiction for final resolution. The Town, by entering into this Agreement, does not
agree or admit that the deed restriction applies to municipal wells; and District does
not agree or admit t6at the deed restriction does not apply to municipal wells. Town
shall not drill, acquire, own or operate a well within the District in excess of 50 gpm
during the term of this Agreement except as provided by this Agreement.
2.2.4 Tide At Termination:
Except as provided in 10.1, the Trust shall automatically terminate at the end of
the contractual term of this Agreement, including any extensions thereof and title to
all Trust wells will, subject to the terms of this Agreement, vest in Town without any
further limitations or restrictions imposed by the Trust.
2.2.5 Reversion In Case Of Breach Or Une orce~b'lity-
In the event this Agreement or the Trust is declared void or unenforceable, or
there is a breach of this Agreement resulting in the termination of this Agreement or
ot6er material violation as defined in this Agreement: a) legal tide to the Trust wells
transfened by District to the Trust shall revert to District; provided, however, the
wells so transfened to District shall continue to provide water to Town on mutually
agreeable terms and conditions for a reasonable period of time thereafter so as to
avoid a disruption of service to Town's customers; aad b) Tide to all wells transferred
by Town to Trust, whether paid by Town or another party other than District, shall
revert to Town as the sole and separate property of Town.
It is expressly understood and agreed by the Parties that the water production
aspect of this Agreement set forth in PART FOUR hereof is part of the total
consideration to be paid by Town to District for the Town's acquisition of the
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District's municipal water systems, and in the event District does not obtain the full
benefit of the water production aspect of this Agreement due to a material breach by
the Town, then District is entitled to appropriate damages therefore. In the event the
wells revert hereunder due to the material breach of the Agreement by Town or due to
an action initiated direcdy or indirectly by Town, Town, as and for additional
consideration for t6e porchase of District's municipal water systems, shall owe the
District an additional amount derived from the following formula: T a Y= Additional
Consideration where "T" equals the number of years, or part thereof, remaining to and
including the year 2020 and any extensions beyond 2020 that would be required by
Section 10.1 hereof following the date of the breach or action by Town resulting in the
reversion; and "Y" is greater of $75,000 or the annual net income District reasonably
could be anticipated to derive each such year had it produced water for Town under
PART FOUR of this Agreement.
In the event the wells revert due to the material breach of this Agreement by the
District or due to an action initiated d"uectly or ind'uectly by the District, then District
sha11 not enforce the 50 gpm pumping restriction against Town and no further
consideradon shall be due aad owing for the purchase of the District's municipal
water system. In all other cases the Parties shall retain whatever rights they would
have had without the elcistence of this Agreement.
This Section 2.2 shall survive the termination of the Agreement.
TRANSFBR OF DISTRICT ~~P ALLOCATION-
District shall transfer its CAP M&I allocation and subcontract (47 acre feet
annually), subject to approval of the Arizona Department of Water Resources, the
Central Arizona Water Conservation District and the Bureau of Reclamation. The
District shall cooperate with Town to expedite the transfer of the District's CAP M&I
allocation and subcontract to Town. Town shall be responsible for paying all eapense
related to the transfer of t6e allocation. All costs incurred by the District in
maintaining, scheduling and utilizing the allocation after December 31, 1996, will be
reimbursed to the District within ninety (90) days after the Effective Date of this
Agreement or ninety (90) days after delivery by District to Town of an invoice listing
s~ch expense, whichever occurs last. Any benefits to be derived from Town's receipt
and use of this CAP allocation shall apply first to lands within the District.
The District has made plans to schedule and utilize this CAP M~I allocation
during 1997 on District lands in a Gronndwater Savings Project. If Town requests the
District to do so, the District shall work with Town to recharge the allocation on
behalf of Town during 1997 in a similar manner. Town shall be responsible for
obtaining the necessary permits, formalizing a contract with the District and any other
documents and expense associated with a plan to recharge this CAP allocation on
District lands. In the event Town has acquired a storage permit, any long term
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storage credits earned by the recharge of this CAP allocation where the CAP water is
paid for by Town shall be credited to the Town's storage account.
P i~T THREE - WATER SERVICE
~ MUNIGIPAi WATER SERVICE WITHIN DISTRICT, NON-
DISCRIMINATION:
Since, under this Agreement, Town will be assuming ownership and control of
the District municipal water systems, Town agrees to make available and provide
municipal water service to all lands within the District as requests for municipal water
service are received in the future, subject to Section 3.1.4 hereof. Rates for Town
municipal water service as determined by Town, shall be based upon Cost of Service
principles and, except as otherwise provided in this Agreement, service shall be
provided on Non-Discriminatory terms and conditions to all Distriet lands. Town
policy for water rates and charges for establishment of service to new customers and
development within the District shall be the same as those generally applicable
throughout Town Service Area, irrespective of the District landowners locadon within
or without Town's boundaries. Town recognizes the agricultural character of the
lands within the District and the need for landowners engaged in subjugating their
lands to irrigation to follow generally accepted farming practices. The rules and
regulations adopted by Town shall attempt to assist the landowners in their pursuit of
agriculture and wi11 not unduly restrict or inhibit their ability to follow generally
accepted farming practices. While much of the District land currentiy outside Town's
boundaries could be expected to annea into Town eit6er prior to or during the
development process, any issue of annexation into Town shall in no way preclude
District landowners from receiving equal consideration and provision of municipal
water service by Town upon request.
3.1.1 Defin'rtion Of Non-Discriminatorv Terms And Conditions:
Non-Discriminatory terms and conditions refers to Town's most recent standard
rates aad condidons of service for municipal water service as approved by Town
Council as set forth in EXHIBIT "3.1,1 " attached hereto as amended from time to
time. The definition is not intended to preclude Town from establishing rates for
different classes of customers, provided customer classifications are established on
such traditional Non-Discriminatory bases as residential, commercial, industrial and as
otherwise commonly provided in the industry and on such cost-related elements of
rate-making such as, but not limited to: elevation and distance from the water
resource(s). Nor shall Town be precluded from entering into special conditions of
service, or applying special charges and fees for certain development or groups of
customers within the District or within Town Service Area as it reasonably deems
necessary to recover the actual costs of providing service to the landowner, such as,
but not limited to: including the cost to satisfy conditions such as replenishment
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10~3~ ~576
obligadons, mitigation of regulatory compliance issues, pwchase of AWS credits for a
specific development, geographically specific water quality and/or treatment measures,
or other similar situations related to compensating Town for special or non-typical
domestic water service conditions, requirements and expense. Nor shall Town be
precluded by this Agreement from charging reasonable water impact fees or similar
fees for system development or connection fees which vary from customer to
customer so long as the standard for determining who will be charged and the precise
charge is applied uniformly throughout Town's service area.
3.1.2 Town Charges For Water Service Outside Of ''ct•
Nothing herein shall preclude Town from contracting to provide municipal
water service to particular lands or parcels outside the District with Conditions of
Service and rates different from and in excess of those charged within the District.
3.1.3 Areas Served Bv Other Water Providers Wi hin Th
Nothing herein shall require Town to provide municipal water service to lands
within the District which are receiving municipal water service from other recognized
and regulated municipal water providers on the Effective Date of this Agreement,
unless or until Town assumes ownership and control of such a water providers
municipal water service area, either in part or in whole.
3.1.4 Town and Dicrrict Sery3ce Obligatt-on~.
By entering into this Agreement, Town is assuming the District's obligation of
providing municipal water service to District lands, members and the public within the
District and to the extent Town utilizes water resources available to District to meet
these obligations it does so as agent for District. Town recognizes that lands within
the District have a right to receive a pro rata amount of water from the waters
available to the District and that in order to be eligible to receive such water, the
landowner must be current on all water assessments imposed by the District and/or the
Association. Town, after receiving written notification from District that a District
landowner/member is at least sixty (60) days delinquent on paying an assessment, shall
either a) pay any assessment for landowners receiving municipal water service from
the Town, or b) notify the landowner that municipal water service will be
disconnected if the assessment is not paid. Prior to exercising t6e disconnect option,
Town shall amend its water service rules and regulations to permit disconnection of
municipal water service for non-payment of an assessment to the District.
3.1.5. Di~et Appronria~t
"Ve ~r gr ) Water Ri$~
Lands within the District are appurtenant to the DistricYs Santa Cruz River
claimed appropriative water right of 29,190 acre feet annually. To the extent
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requested by District, Town agrees to seek recognition of this renewable resource for
purposes of proving an Assured Water Supply for lands within the District and to
utilize this renewable resource for municipal water deliveries, to the extent such
surface water right is actually recognized by ADWR, recognizing that the legal
character of appropriative rights may limit the application of this renewable resource.
Town and District sha11 cooperate to put the appropriative rights to full beneficial and
to the eatent the full appropriative right is no longer needed for meeting agricultural
water needs, t6en the Parties shall take such actions as are prudent to utilize the
appropriative right for non-agricultural purposes.
~,,Z. NON-POTABLE NON- RRi(TATinN WATBR SERVI E•
The Parties shall both have the right to provide non-potable, non-irrigation
water service within the District. The Parties shall work through the Operating
Committee to determine how to best meet the water resource needs within the District,
including meeting the requests within the District for non-potable, non-irrigation water
service, with Town making the final decision on how or who serves a particular
request, provided no such determination shall preclude the District from delivering or
a District landowner/member from receiving water from the District to the full extent
permitted by Arizona law. The Parties shall continue to serve existing non-potable,
non-irrigation water customers as of the Effective Date of this Agreement, unless
otherwise mutually agreed by Town and District. Town agrees to extend its service
area, as recognized by the ADWR, in a manner so as to preserve the right of
landowners within the District to convert Agricultural Grandfathered Rights to Type I
Rights to the maaimum extent possible without unreasonably interfering with Town's
ability to provide municipal water service to its customers.
3.2.1 Non-Potable~ Non-Lr*igation ~rvice Defined-
District non-potable, non-irrigation water service is defined as water provided
within the District from District inigation delivery systems aad facilities (wells,
canals, ditches) for such purposes as construction, dust control, road maintenance, fue
protection, commercial and industrial uses (i.e., sand 8c gravel operadons, cooling
towers, etc.) and turf areas (i.e., golf courses, cemeteries, roadway landscaping,
etc.).
3.2.2 (~oo~g To Meet ADWR Conc~rvation Reauirementc-
~
Having the District serve large non-potable, non-irrigation water users may
assist and benefit Town in complying with GPCD requirements for Town Service
Area. District shall work with Town where it can assist in meeting these
requirements, however, nothing in this Agreement shall obligate either Party to
provide water service as agent of the other in violation of any Department of Water
Resources Management Plan.
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3.2.3 DistricYs Ob ig~tion To Serve District ~ downers (S ArPhr~lderc)
The District has an obligation to provide water service to iYs landowners
(shareholders) who pay District assessments. Town recognizes the District's right to
provide water service for agricultural use and when District landowners convert their
lands from irrigation to non-irrigation, non-potable water uses (as long as the water is
not being used primarily for municipal water purposes) and where Town fails to
provide municipal water service upon non-discriminatory terms and condidons in
compliance with its adopted ordinances, resolutions and policies.
3.2.4 ~de~ial cc~n~ImiEation-
District agrees not to supply water for residential landscape irrigation through
its irrigation distribution systems, without fust receiving Town approval, except for
incidental lawn or landscape irrigation by District shareholders. District will
cooperate as necessary with Town to account for such water use.
~ AGRi_CULTUILAL WATER ~R~Vi~F-
Within the District, the District shall retain sole management and control over
District water resources and facilides as those pertain to Agricultural Water Service.
Nothing herein shall prevent the District from entering into agreements to provide
service and operate District irrigation facilities in a manner which are in furtherance
of the District's govemmental duty and primary goal of making agricultural irrigation
within the District as efficient and as economically viable as possible.
~
4. EFFLUENT,, RF[_i.AiMFn WATFp-
Town and District will attempt to maximize the use of effluent and reclaimed
water within the District and Town Service Area wherever and whenever possible. As
mutually agreed, Town and District shall cooperate on projects to accomplish this
goal, including projects to recharge effluent, reclaimed water and other water
resources, whether on District agriculiural lands or projects for direct recharge and
replenishment. The Operating Committee shall advise the District and Town and
recommend actions to accomplish this goal.
~~1RT FOUR - WA A pRn UCTION CH RGE~
4_.~ WATER PROD ION•
This Agreement is a production agreement and/or a requirements contract.
Subject to Section 4.3 hereof, Town will annually obtain from Disirict and/or pay
District for t6e first twenty thousand (20,000) acre feet of municipal water demand
provided by Town or its agent within the District. Payment for water production in
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excess of twenty thousand (20,000) acre feet is subject to negotiation with District,
with Town having the option to obtain amounts in excess of twenty thousand (20,000)
acre feet annually from altemative sources located outside the District. Nothing
herein shall limit Town's right to obtain water from any source for municipal water
service to Town customers located outside of the District.
~ WATER PRODUCTION RATES:
4.2.1 Initial Rates:
The District shall operate the Trust wells and provide water therefrom to Town
under the following rate schedule. The rates are to be adjusted annually as described
in Section 4.2.2. The inidal water production charges presented herein incorporate a
tiered-rate structure which provide a discount for larger volumes of water provided
annually to Town:
0 - 2,000 AF = ~200/AF
2,001 - 5,000 AF = $190/AF
5,001 - 10,000 AF = $180/AF
> 10,000 AF = $175/AF
4.2.2 Rates for Water Used Oatside of District:
Town, at its sole determination, shall decide the amounts of water, if any, that
Town shall purchase from District for delivery and application to lands outside of the
District, subject to t6is Agreement and Arizona law.
Water produced for Town which is exported outside District boundaries can
have a detrimental impact on the water resources available to the District and
landowners within the District. Ia recognition of this potential detrimental impact,
Town agrees to pay, in addition to the foregoing rate schedule, an impact fee of fifty
dollars ($50) per acre foot for water produced from Trust wells and delivered by Town
outside the District, unless Town provides water from ontside the District for use
within the District on a one for one basis for the water delivered outside the District;
said exchange water shall be of a quality and provided in a manner acceptable to
District. The terms and condidons of exchanges shall be set forth in a separate
Exchange Agreement between the Parties.
4.2.3 Annual Adiustment Of Wholesale ~Vater Rates:
EXHIBIT "4.2.3" describes the methods and formulas to be used to annually
adjust the water production charges.
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4.2.4 Annual Adiustment For ~mount Of Water De 'vered Ontcide D'ct~,
ict-
Subsequent to December 31st of each year, the Operadng Committee shall
review the amount of water delivered from Trust wells to Town for delivery to Town
Water Utility customers outside the District during the previous year and determine
any adjustments that may be necessary in accounting for the amount of water delivered
outside the District annually. Unless otherwise required by law or in a separate
Exchange Agreement, if one is executed between the Parties, any adjustments shall be
applied as either a credit on the succeeding years billings by the District or, in the
case of a debit, within 90 days of an Operating Committee determination that District
is due additional amounts, Town shall make payment to District for the full amount
determined to be due District by the Operating Committee.
4.2.5 SSles ~d Othet Taxe. ~nd ~vernmen ~ As m ntc•
Town shall be responsible for and pay all applicable sales or other t~es and
govemmental assessments related to the provision of municipal water service by Town
or the production of water by District for Town.
4.2.6 f'.
o~di~g_ of Cn~mer Acconn~ -
To distinguish between Town municipal water system customers that are served
within the District and those served outside of the District, Town shall code the
accounts of all Town municipal water system customers in a manner that provides for
this distinction.
~ SYSTEMS ACQL~iRFD BY TOWN ~FTER EFFECTIVE DATE
With respect to any system or wells acquired by Town subsequent to the
Effective Date of this Agreement and through which Town or its agent is making
municipal water deliveries within the District, including Continental Ranch, tius
Agreement shall establish a method of transitioning such system so that, within a
reasonable period of time, Trust wells are providing the water thereto. Unless
otherwise mutually agreed, Town will have the District produce all water needed by
Town to provide and serve municipal water service within the Disfrict. Town is
permitted to provide municipal water service within the District to customers and
systems acquired from t6e City of Tucson or other municipalities, provided the Parties
establish a mutually acceptable method of transitioning such system so that, within a
reasonable period of time, Trust wells are providing the water thereto. Unless
otherwise agreed the transition period shall not eaceed nine (9) months; provided,
however, in t6e case of existing service areas acquired from the City of Tocson, where
water is obtained from non-Trust sources that were providing water for the area prior
to acquisition by Town, no payment obligation will arise under this Agreement until
either (a) commitments to the City of Tucson are fulfilled or (b) two years after Town
16
~ Q~3~~ 2~~'t'~ ~
CWUA F~4.LSTAF~ FLATS SYSTEM
ESTIM~T~D REG-t~t'-~FSTRUCTI~N' COS~'-~g46
; ~ . ~ ~ i.-
_Stara
s 1,000-gallon 1lydropneumatic tank w/con~ols
,
F't Plin
' L~vg~.h 1n i t o s
~ ' 3" (PVC) 2,800' ~12
; ~~S
~ . _ 1 metered service_ _ _ .
~
t
s
~ ~ ~ ~ ~ 2 ~ ~ ~
acquires the system or receives compensation, other than franchise tax, or permit
revenues, based on the operation of the system, whichever is later. Thereafter, the
provision of municipal water service to such systems and all water deliveries related
thereto shall be deemed water deliveries by Town pursuant to PART FOUR of ttus
Agreement and District shall be paid therefore at rates specified herein and adjusted in
accordance with this Agreement. In entering into future agreements, Town shall
comply with Sections 6.6(e) and 8.42.
~'ART FIVE - WE .L.c~ WFi i -~iTF4
~1 OPERATION & M iNTFN N F(O~M) RF4ppN~~Li,,ITY DfiFINF~h-
5.1.1 District Res n ibi itv. The District shall be responsible for all expense
related to the operation and maintenance of Trust owned wells and associated
equipment, including mechanical parts (motor and discharge base, bowls, column,
tube, shafting, bearings, discharge meter, etc.), electrical controls, electrical energy
to operate the well, the primary well-site electric meter, well picturing (television
scanning) and scrubbing as necessary. The District shall also be responsible for any
well-site maintenance related to the flushing, pump testing or development of the
Trust wells.
1 2 Town Resnonsibili~. Town sha11 be responsible for all expense related to
the operation and maintenance of everything other than the wells and directly
associated equipment. Town's responsibility shall include, but not be limited to,
storage and pressure tanks, booster pumps, associated electrical controls and
plumbing, electrical energy to operate pumps and other Town electrical equipment,
water treatment or disinfection equipment, water quality testing, monitoring and
compliance, and well-site fencing, lighting and general maintenance. Town shall have
the right to operate any disinfection or other water treatment equipment that injects
direcdy into a Trust well and be responsible for the expense of operating and
maintaining such equipment. Before Town would install any such equipment, Town
must coordinate with the District to enswe the equipment will not unreasonably
restrict the operation and maintenance of t6e well.
5.1.3 Division Po"nt. The division of respoasibility between the Parties at
Trust wells shall occur within a few feet of the base of the well and immediately
downstream of the water meter located on the well discharge line. The Operating
Committee shall establish eahibits of the dividing point(s) at each Trust well-site,
conforming as closely as possible to this criteria.
5.1.4 ,~oint Resnonci~ili~y. Certain well-site equipment will serve both Town
and the District, such as the primary utility electric meter and the main electrical
breaker or disconnect, and the expense of maintaining or repairing such equipment
shall be shared equally.
17
f~6~~ 2583
5.1.5 Joint Use Well-citec. The Oshria Park and La Puerta del Norte well-sites
have wells and equipment for both domesdc and irrigation water supply, and at La
Puerta del Norte, the domestic water well is located on a separate, non-adjacent parcel
from where the water ta.nks aad booster pumps are located. Well-sites that incorporate
District irrigation wells shall continue to remain under District ownership and these
well-sites shall not transfer into the Trust. The responsibility for operation and
maintenance of well-site equipment shall otherwise be divided as provided in this
PART FIVE of this Agreement. Irrigation wells and well-sites shall remain under the
sole ownership and control of the District until such time as the District determines
they have become surplus to the District's primary duty of providing for agricultural
water supply, at which time Town has the right of first refusal to negotiate with
District for the purchase of these well-sites.
The facilities, equipment and property at each joint use well-site (Trust and/or
District well-site) shall be defined in EXHIBIT "5.1.5", including the division of
ownership and operational responsibility subsequent to the Effective Date of this
Agreement. EXHIBIT "5.1. 5" shall be expanded to the extent the Parties agree to use
other facilities jointly. The District and Town shall cooperate in the operation and use
of Trust well-sites, shall each have unlimited access to the well-sites, and shall
maintain liability and property damage insurance as described in Section 11.1 of this
Agreement.
~ IB.RIGATIOri ~VELLt AS ~~rRR~FN[~y BA('KrIP SiTPPI Y
Two District irrigation wells, 25K1 at Oshrin Park and 17P1 at La Puerta del
Norte, have the capability of providing a backup domestic water supply in emergency
situations. The District shall continue to make these irrigation wells available to
Town during emergency situations at Oshrin Park and La Puerta del Norte antil such
time as Town has provided another means of providing a backup water supply for
these two cwrrently isolated municipal water systems, either through interconnection
with another system or well, or t6rough the construction of secondary or additional
municipal water system wells.
5,~ WF?i-i 1~R.PL-ACE FNT~ NEW WE i 4, UPCRA~R . ADD.~I4NS
Town and District shall have the right to add new equipment and facilities, or
upgrade eaisting facilities at each Trust well-site and each Party shall bear its
respective expense depending upon the nature and use of the facility or upgrade.
Ownership of new or upgraded facilities, unless otherwise mutually agreed, shall vest
in the Party installing the new facilities or improvements. The Operating Committee
shall be responsible for coordinating any Trust well-site additions and upgrades to
insure they do not significandy interfere or encroach upon the other Parties ability to
continue to operate, maintain and repair facilities and equipment.
18
~a~~~ ~5~~
Replacement of a Trust well due to failure (i.e., water production or water
quality problems, casing collapse, etc.) will be the responsibility of Town. Any
additions or upgrades to Trust wells (i.e., deepening, modification for water quality
purposes, etc.) shall also be the responsibilifiy of Town. District will have an opdon
to finance Trust well additions, upgrades or replacements. Reimbursement by Town
to District, if District does finance, would be over a four-year period at the then
cunent prime interest rate plus three (3) percent. Any additions or upgrades to Trust
wells, or District irrigation wells that may transfer to the Trust or Town in the future,
would be at the option of Town and paid by Town.
Amounts paid by Town or District for repairs, replacement or upgrades to a
Trust well which reverts to District in accordance with Section 2.2.5 of this
Agreement, shall be credited against the acquisidon price of the well and well-site in
the event Town later acquires the well from District, less a depreciation or
amortization factor as described in EXHIBIT "5.3".
The expense of developing any new water wells to serve Town Service Area
shall be the responsibility of Town.
~ T AN F-R OF OT R Di4TRtC'T -~CiTF~ T TOWN'
The District's primary duty is the supply of water for agricultural irrigation.
When District determines imgation well-sites have become surplus to their primary
purpose, Town shall have the right of first refusal to negodate with District for
purchase of these well-sites, recognizing that it is not possible for District to forecast
a time line on the availability of particular wells or the sequence in which they might
become available. Well-sites which are purchased by Town from District, and
transfened to the Trust subsequent to the initial transfer of well-sites by Town and
District to the Trust, shall not be subject to reversion to District upon termination of
this Agreement. During the term of this Agreement, District well-sites purchased by
Town shall be held in the Trust. EXHIBIT "5.4" describes methods of valuing
District properties. Town will have the freedom and authority to determine the
pricing to a developer for any well-sites purchased from the District and any proceeds
received by Town from a developer belong to Town.
~ ~QSSIB - FU iRF NSFFR OF IaISTRi(`T ASSFT~ TO TOWN
CONTINUATION OF RRiGATinN WATER 4FRVI E- ~
At some future time, in the event of substantial diminishment of agricultural
irrigation activity within the District, the Parties or their Authorized Representatives
may wish to consider the transfer of remaining District assets and responsibilities to
Town. The Operating Committee is authorized to consider this option and any
recommendations for such iransfer whenever the Operating Committed determines the
time is appropriate. At such time, serious consideration shall be given to preserving
19
~~~3u 2585
and/or restructuring the unique authorities of a Special District and the continued
value of the existence of such a District to Town.
In the event the District is subsequently dissolved, and Town succeeds to the
District's assets, rights, duties and obligations, Town shall undertake, to the extent
permitted by law, to deliver irrigation water to District lands in accordance with the
cost of irrigation water production and continue to deliver water to irrigable lands in
the District.
PART SIX - 14LF_TE IN[~~ Rli.~i iNC C()~14(MiTTFF
REPRESENTATIVFS
~ ELECTRIC METE iNG~ PAYMF~v'r OF ELECTlZi(' R~t I c-
Where electrical service delivered by the providing utility is metered through a
single utility meter to equipment and facilities operated by both Town and District at
the same well-site, District shall pay the monthly electric urility bills and thereafter
invoice Town for its share of electrical energy usage as provided in EXHIBIT "6.1".
If, under Section 8.4, Town arranges for the purchase of lower-cost electricity which
is subsequently made available and utilized for the operation of equipment and
facilities at joint use well-sites, Town shall pay for the expense of procuring and
scheduling any such electrical energy and a subsequent adjustment shall occur in the
wholesale water rate made by District to Town for the appropriate billing period(s) as
provided in EXHIBIT "6.1
6.1.1 Bailowatt-Ho~ Me~r*s~ ttims
't~n~ Flectricc~l En~rgy U~: When Me~crc
Ar~ Not Oeer~t+on~i~ Re~lvinE Di 9~cies Ie Electric Iitilit~~
.
Kilowa~-Ho~r Me~p* I~~~~.
Kilowatt-how (electric) meters shall be installed at all well-sites where Town
and District jointly operate facilities. These meters shall be installed in a manner that
clearly acconnts for the use of electrical energy by equipment and facilities owned and
operated by each Party. Each Party shall be responsible for the expense of installing
and maintaining kilowatt-hour meters utilized to account for the use of that Party's
equipment and facilities.
EXHIBIT "6.1 " prescribes the proc~ure to follow in estimating electrical
energy use and adjusting billings during periods when an electric meter (kilowatt-hour
or otherwise) is not operational. EXHIBIT "6.1 " also prescribes the method of
accounting for any discrepancies between the amount of electrical energy billed by the
electric utility and the sum of kilowatt-hours metered at a particular well-site during a
billing period. The Authorized Representatives shall promptly respond to requests
20
~ ~'6~~ ~~~b
from either Party to check the accuracy of electric utility or kilowatt-hour metering
equipment and EXHIBIT "6.1 " prescribes the process for testing electric metering
equipment and assigning related costs to the appropriate Party.
WATER METERING:
A water meter shall be installed on the discharge side of each Trust well, to be
located as close as possible to the discharge base of the well. Where this is not
possible, the Parties shall agree on a mutually acceptable location. The District shall
be responsible for the operation and maintenance of ineters that record the water
production from Trust wells. Recordings from these meters shall be the basis for
accounting for the amount of water delivered by District to Town. EXHIBIT "6.1 "
describes the procedures to follow in estimating water use during periods when a water
meter is not operational.
~ 14~TER ACCESS~ INSpF~'TION R~ADING-
Each Party shall have access at a11 times to all electric and water meters
covered under this Agreement. The Authorized Representatives shall establish a
schedule for the reading of all such electric and water meters and no less than a
weekly recording from each meter shall be maintained by the Parties.
~,.4 BILLINGS:
The District will send statements monthly to Town for electrical energy used by
Town facilities at Trust or other joint-use well-sites, and for water produced by Trust
wells and/or Dislxict wells used for emergency backup water supply to Town. Other
irregular miscellaneous billings may occur between the Parties, such as the
apportionment of costs related to maintenance and repair of shared equipment at joint
use well-sites. EXHIBIT "6.1 " prescribes general billing and accounting procedures
between the Parties, along with a billing schedule, due dates and the process for
resolving disputed or delinquent billings.
~•4.1. Refusat To Pay:
In the event one Party to this Agreement fails or refuses to pay the other Party
sums due pursuant to this Agreement, subsequent to fulfilling the procedures described
in EXHIBIT "6.1 the Parties shall be entided to enforce any of their rights under
law, including without limitation of the foregoing, the right, after 30 days written
notice to the other Party, to refuse to deliver further water or electric power until
undisputed sums are paid in full.
21
2587
~ TOWN WATER UTILITY SELF SUSTAINING; RELMBURSEMFNT FOR
TAXES ON DIST~tICT A ~RICULT JRAr i ANn4-
Town represents and warrants that Town Water Utility will be self-sustaining,
meaning the revenues generated from water sales, charges to water customers
(including, but not limited to, facility charges, water development fees and system
improvement agreements), donations and grants shall be equal to or exceed the cost
of: (1) oper~ting, maintaining, repairing, improving and expanding Town Water
Utility; (2) covering reasonable reserves; and (3) repaying debt fmancing of any kind
where the proceeds of such debt financing direcdy benefit Town Water Utility.
On or before March 31 st of each year, the Operating Committee shall determine
whether or not Town, any subdivision of Town or any entity created or controlled by
Town, has made any charges for taxes, fees or assessments against agricultural lands
within the District or upon the District's membership during the previous calendar
year, and determine further whether or not any such charges were used to repay Town
or amortize the acquisidon price of the capital component of operation of Town's
municipal water utility. The District may independently submit any evidence in
support of a claim for such charges and the Uperating Committee shall give any such
claims thorough consideration. In the event t6e Operating Committee determines
charges, as set forth above, have been made over the proceeding year because Town
Water Utility has not been self-sustaining, as defined above, the amount charged
against District agricultural lands shall be added to the following year's wholesale
water rate charged by the District to Town. As an option, Town may elect to make a
lump sum payment to the District. EXHIBIT "4.2.3" prescribes the procedure for
making adjustments in the wholesale water rates cLarged by District to Town resulting
from a determination that District agricultural lands or its membership have been
charged taxes and fees as defined herein. Any such adjustment or payments shall be
ia addition to any other remedy available to the District a# law or equity arising from
any breach of the representation and warranty contained in tlus Section.
Notlung herein shall prevent Town from charging water development or similar
fees to new customers or development to fund the cost of installation of water
facilities or purchase of water supplies, and such water development or similar fees
shall not be added to the wholesale rate charged by District hereunder. Neither shall
any CAGRD charge or assessment levied by the CAGRD on Town be included in any
District wholesale water rate.
~ OPERATING COM iTTRF -
An 4perating Committee ("Committee") shall be established with equal
representation from both Town and District and shall be composed of between two (2}
and eight (8) members. The Authorized Representatives shall be member of the
Committee and the District President and the Town Mayor shall be ex o~cio
22
E0~3~ 2~88
members. Additional members shall be appointed at the request of the Authorized
Representatives. No action of t6e Committee shall be binding unless a majority of the
members are present and each Party is equally represented. The Committee shall:
(a) organize and implement the transfer of District's municipal water
systems to Town;
(b) deal with on-going communication, implementation and operational
issues;
(c) resolve unanticipated problems and issues;
(d) be responsible for maintaining a working relationship between the Parties
in fulfillment of the terms of this Agreement;
(d) work to develop long range water resource plans for the Joint Planning
Area; review and make recommendations regarding the purchase, lease,
or acquisitioa of any interest in water production, distribution and
transmission facilities and/or water resources located within or which
will serve within the District; and develop and recommend strategies to
deal with outside agencies, such as CAWCD (CAP), ADWR, ADEQ,
AWBA, CAGRD, the City of Tucson, Metropolitan Domesdc Water
Improvement District and others;
(e) develop a budget for submittal to the Parties;
( fl be authorized to hire legal counsel, to falfill the purposes of tlus
Agreement, to the extent funds are provided therefore in the budget
approved by the Parties; and
(g) perform such other duties and functions as prescribed in this Agreement.
Only members of the Committee or their duly designated Altemates may vote at
Committee meetings and shall be authorized to act in fulfillment of the provisions of
this Ageement. No voting is authorized outside of properly noticed Committee
meetings.
The Parties shall support the recommendations of the Committee in matters
involving water planning for the Joint Planning Area and in dealing with outside
agencies, such as CAWCD (CAP}, ADWR, ADEQ, AWBA, CAGRD, the City of
Tucson, the Metropolitan Domestic Water Improvement District and others.
The Committee shall initially meet no later than fifteen (15) days before the
Effecdve Date of this Agreement. The inidal meedng sha11 prioritize the dudes of the
23
IQ~3~ ~5$9
Parties in accomplishing the transfer of the District domestic water business and
facilities to Town as expeditiously as possible. The Committee shall thereafter meet
not less than weekly until the transfer is essentially complete, excluding those items
that require approval of third party interests. Thereafter, the Committee shall
determine a schedule for further meetings which shall be no less frequent than once
every three (3) months. Committee meetings shall be open to the public with meetings
posted no less than 24 hours in advance at the primary place of business for each
Party. Each Party may call special meetings of the Committee upon adequate notice,
wluch shall be not less than five (5) working days unless otherwise mutually agreed by
the Authorized Representatives. The Parties are free to have other employees, agents
and consultants in attendance and participate in Committee meetings unless otherwise
mutually agreed by the Authorized Representatives. Except as otherwise provided or
mutually agreed, and as may be consistent with budget authorizations, each Party shall
bear its owns costs related to meeting expense. The Authorized Representatives shall
agree upon a rotating schedule of responsibility for administering Committee
meetings.
~L_7 AUTHOR7F~ REPRESENTATIVES, Ai
TE]ZNATF.S-
The initial Authorized Representatives shall be:
(a) Town Manager or approved Altemate of Town and,
(b) the Manager or approved Altemate of District
Either Party may at any time change the designation of its Representative or
Altemate by written notice to the other Party. Each Party may designate one
Altemate to act on behalf of and in the absence of their Authorized Representative and
an Alternate shall be deemed to be acting with the authority of the Authorized
Representative oa behalf of the Party they represent. Authorized Representatives or
their Alternate shall be authorized to act on behalf of the Party they represent in the
implementation of this Agreement and in respect to all matters contained herein which
are the duties and responsibilities of the Parties, provided no Authorized
Representative or Alternate shall have authority to amend any provisions of this
Agreement.
SL,$ rUSTOM~?R DEPOSITS•
The District maintains cash deposits made by its municipal water system
customers. The sum of these deposits on the Effective Date of this Agreement shall
transfer to Town. Town may continue to maintain these deposits on behalf of each
customer in whose name they are held or, if Town so chooses or Town policy so
dictates, refund each customers deposit. In no case, shall customer deposits be
24
~ Q~t~~ ~~J'~~
utilized to fund any other Town purpose, except as provided herein. When Town,
after having made a reasonable effort to locate any customer in whose name these
deposits are held, is unable to locate a customer, Town may place the customer's
deposit in a Town managed fund specifically designated to subsidize water payments
for indigent or low-income municipal water system customers of Town or, in the
altemative, such deposits may be forwarded to an appropriate State of Arizona agency
that will utilize the funds for a similar purpose.
~'~9?RT SEVEN - WATER OiJALITY~ AWS
~ WAT~R O I ITY
Town is responsible for water quality. The District does not warrant nor
guarantee that water produced by Trust or other District wells and delivered to Town
will be suitable for municipal water service. Town shall assume full responsibility for
compliance with water quality regulations and standards in the subsequent use and
distribution of all water received from Disirict.
Town is not obligated to accept delivery of water produced by the District
which does not meet water quality standards for municipal water service. The
requirement to apply standard disinfection measures or other minor treatment
procedures, such as distribntion system coatings, shall not be considered to be water
quality or uncoatrollable force issues which would disqualify water supplied by
District for sale to or acceptance by Town. To the extent The District is unable to
provide an acceptable product to Town for use in the District or Town Service Area,
Town and District shall first determine if:
(a) C~ther District wells are available to replace the problem well;
(b) Construction of another well within the District is a viable or preferred
solution;
(c) Construction of t6e well can economically be altered and realistically
be expected to mitigate a water quality issue;
(d) Treatment of the water produced by the well is a viable or prefened
solution;
(e) The affected well is still critical to the supply of Town Water Utility.
If the Authori2ed Representative of Town cannot agree to any of the above or
other possible solutions, Town is free to search for altemative water supply resources
outside the District to the extent of the reduction in supply caused by a Trust or
25
~~J~~
District well that no longer can provide an acceptable supply of municipal water for
service by Town.
The Authorized Representatives shall deal with water quality issues as they
arise from the provision of water by District to Town, including the potential
utilization of other District wells to resolve a particular water quality problem. The
District shall determine which, if any, District irtigation wells are available at a given
point in time for conversion to municipal supply for Town. Consistent with hold
harmless and indemnification provisions in this Agreement, the final decision on
changes or improvements to or replacement of facilities owned by Town or placed in
Trust for the benefit of Town, which are not in compliaace with existing laws, rules
and regulations governing the provision of water to the public, shall be at the sole
discretion and authority of Town.
7.1.1 Resoonsib~it,~? Ex~p,c~ Of Resolvin~ Wa p* Q A~1'
y~uec-
a. A~uifer or her on minarinn - The Authorized Representatives shall
meet and mutually determine a course of action with the cost of remedy
as provided in Section 7 of this Agreement.
b. Water Accen~ed For Delivery by Town - Town shall bear the cost of
remedy.
~ WAT~R TESTIN , MONITO~iN1(", COMPI~ AN('F•
Town shall be responsible for all expenses as they relate to water quality issues
and the production and supply of municipal water, including water treatment,
disinfection, testing, monitoring, sampling and compliance.
7~ A~SLTR~?1~ WATER 4i~PPt_Y~ MANA .u~?u!' OF AO ~iI FFR
Town agrees to exercise its best efforts to provide and maintain an AWS, as
this term is defined in Arizona law, for lands within t6e District and Town Service
Area. Town and District pledge to act in a prudent and responsible manner to
cooperate in managing the water resources available to Town and District and to
preserve to the maximum possible extent, a quantity and quality of water supplies that
enhance long-term economic development within the District and Town Service Area.
Those quantities of water identified in the District Assured Water Supply
("AWS") report (hydrology report) on file with ADWR, transfer to Town at no
addidonal cost, to be used by Town to benefit first those District lands that can be
anticipated to require an AWS at some future time. Only if the Authorized
Representatives agree that there is sufficient amounts of AWS, either within the
District's designation or Town's overall designation of AWS, above and beyond the
26
f0~~~ ~J~~
anticipated future requirements of all as yet undeveloped District lands, can the benefit
derived by the transfer of the District's Asswed Water Supply report or designation be
distributed by Town for use on lands outside of the District. The Authorized
Representatives are authorized to take all necessary steps to further m~imize in
quantity a determination of AWS for District lands, using any and all of the water
resources the District ma~es available to Town and/or Town has available for general
application within Town Service Area. Nothing in this Agreement shall preclude
Town or District from other separate ageements wluch enhance the AWS status of
District or Town Service Area lands through such activity as replenishment, recharge,
reuse or other water augmentation projects, or from entering into agreements for other
purposes, such as certification of an AWS for individual development(s) or the
permitting of commercial and industrial facilities.
The quantity of water resources actually available to the District or Town
Service Area for municipal water service, or for purposes of AWS, may be adjusted
from time to time upon determination and notificatian by ADWR or other agencies
with legal jurisdiction and authority to do so.
PART EIGHT - Vi/AT~R, ELFCTR_i('~7'y, COOp~RATION
$~,.1 LIISTRICT SIJRFACF WATFR A_ 1N`_ATinN-
In return for potential future benefits to Town to be derived from DistricYs
Santa Cruz River appropriative water right of 29,190 acre feet annually. Town
agrees, to the fullest eatent allowed by law, to make this renewable resource available
for new municipal water service on District lands and, to the fullest extent recognized
by ADWR, for purposes of proof of Assured Water Supply. The Parties recognizing
that appropriative rights are granted with specific points of diversion and points of
application, which may limit their application to District lands. The Parties sha11
cooperate in maaimizing the benefits that can be derived for lands within the District
from the appropriative right and shall mutually agree on timing and procedures for
transfemng any District appropriadve water rights from agricultural to municipal use,
and the ownership thereof for lands that are ret.ired from irrigation use and converted
to urban land use.
RETIRED IGR's/TYPE I RIGHTS:
As lands within the District are retired, Town, to the eatent permitted by 1aw,
is permitted to obtain I.G.R.'s for transfer to type I Rights. Town shall make a
reasonable effort to develop and expand Town Water Utility in a manner so as to
retain the right to convert to Type I Rights to the maximum extent possible. This
provision is not to be constcved as prohibidng Town from extending Town Water
Utility in a manner consistent with best engineering practices and fire flow
requirements.
27
~ ~~3~~ ~~J~3
~ ELECTRICITY/ELECTRIC SUPPLY:
The District agrees to udlize the lowest cost electrical power supplies available
in the operadon of Trust wells, after providing electric power to District's primary
purpose of providing water first for agricultural imgation and pre-existing
commitments to provide water for non-agricultural purposes.
It is a common objective of the District and Town to find and secure the lowest-
cost electrical power for the use of Town and District inhabitants. If the District,
without prejudice to its primary beneficiaries, can secure electrical power resources
for the benefit of Town, it, with Town's approval, will do so. If Town makes lower-
cost electric power available to the District to operate equipment and facilities at Trust
wells, the District, consistent with its contracts, will use the power made available and
flow through the savings in the form of a lower wholesale water rates to Town, to the
extent the facilities in the Trust receive and are capable of utilizing such electrical
power. EXHIBIT "4.2.3" describes the procedures to follow in crediting Town for
any lower-cost electric power utilized by Town and District at Trust well-sites.
Town recognizes that District contracts for electrical power have certain
limiting provisions and that in the event of non-compliance, District shall suffer
expense and harm. Understanding DistricYs intent to supply available electrical power
resources first for agricultural water pumping and monthly variations in available
supply, Disttict agrees to make further use of DistricYs Hoover Power entitlement
available to Town within these constraints. The District shall determine, in its sole
opinion, the availability of District electrical energy resources over and above those
required for agricultural purposes. To the extent Town requires producdon of water
from the District or the District to furnish water with electrical power in a manner
which would violate any provision contained in District electrical power or other
supply contracts, District is hereby indemnified from loss or additional expense by
Town.
$_4 ~OOPERATION, FSniIR[`F p]ZQ~ TinN;
8.4.1 Electn_
'citv: Town and District agree that to the extent possible, the
District Hoover Power allocation should remain in the District (Marana) area, and as
agricultural irrigation demand decreases over time, it would be desirable if the
resource were to transition from irrigadon to urban (Town) uses within the same area.
Town and District will joindy seek and support State of Arizona and/or Federal
Govemment reallocation of District's current electric energy entitlement and joindy
take any and all action necessary to preserve or enhance District's allocation to the
fullest possible extent.
Whenever appropriate, Town and District, through their Authorized
Representatives, shall joindy undertake efforts to secure additional electrical power
28
IQf3~ ~59~
supply from other sowces and cooperate in pursuing electrical power and wheeling
arrangements which will permit them to share in savings from lower-cost electrical
power resources, including pursuing wheeling electrical power the District deems to
be surplus to its needs through AEPCO and/or TRICO to wells in the TRICO service
area. Any discussions or negotiations Town may have which could potentially involve
or impact existing District contracts with T.E.P. or the Arizona Power Authority will
be conducted only in unison with and by mutual agreement with District. This in not
intended to restrict Town from investigating options it may have to purchase electrical
energy resources or services, only the requirement to work with the District where this
may involve eusting District contracts or a District obligation to accept power under
this Agreement. Town shall provide District with written notice of any attempt by
Town to obtain altemative electrical supplies.
8.4.2 Water Rig~: Town and District shall take all reasonable steps to
preserve and protect District and Town water rights and resources and neither party
will knowingly enter into an agreement in the future which will adversely affect the
other Party's water rights and resources or limit the economic benefit that can be
received therefrom. When Town and District mutually agree that certain District
water rights are best protected by redesignating portions of such rights from
agriculture to MBtI uses, the Authorized Representatives, when mutually so directed
and authorized by the Parties, sha11 have the authority to make application to
appropriate agencies or authorities to effect the desired redesignation, consistent with
applicable laws and regulations and as re-designation and/or conveyance can be
accomplished.
8.4.3 Rechargg, Re~lPnishment, redi c: Town may execute an additional
contract with District for (I) the recharge of the 47 acre feet CAP M&I allocation, and
(ii) recharge of or use of other Town resources where, unless otherwise mutually
agreed, Town receives all recharge credits. Contracts, permitting, scheduling and
other details would need to be negodated at the appropriate time.
Town is a member of the CAGRD and will use its best efforts to obtain
cooperation from the CAGRD to use CAGRD or other approved recharge facilities to
fulfill Town's and any other CAGRD members' recharge obligation within the District
to the degree desired by the District.
In the event Town obtains CAP, effluent or other water resources of adequate
quality for irrigation of District landowner crops, Town may provide such water
resources to District at a mutually agreed price, recognizing use of water resources in
this manner by the District acts to enhance the eventual quality of the water upon
subsequent recovery for MBtI purposes and is an economical means of achieving water
storage and reducing the aeed for treatment upon recovery. The District will execute
any and all agreements necessary to provide Town with the resulting stored water
credits but Town agrees to share such credits with the District in a mutually
29
IOb3~ ~595
satisfactory manner. In the event third parties seek to contract with District for
recharge or replenishment of CAP water or other water resources in exchange for
credits, District shall strive to make such credits available for pwchase by Town on a
first right of refusal basis. In the event water credits or quantities of water are legally
available to Town as a consequence of urbanizadon of irrigated lands within the
District, a11 such credits or quantities of water shall become the right and property of
Town without further consideration, except as otherwise mutually agreed.
PART NINE - RIGHT OF ~1 CE~S; MIS Fi i ANF.niI4
PROPERTY: FIBER OPTIC~ AN~ BMPLOYEES
~ RIGHT OF ACCESS:
Town shall have the right to cross District irrigation facilities subject to the
standard permitting process of the District but will not be allowed to parallel District
facilities within District right-of-way and easements wit6out the approval of the
District, which approval is generally not granted by District. Domestic water systems
and facilities that initially transfer from District to Town under this Agreement, which
are located within District rights-of-way and easements, shall be granted the right to
remain therein and Town shall be granted access t6ereto at any time. When working
within District rights-of-way and easements, Town agrees to restore District property
to its original condition upon completion of any maintenance or repairs therein. Town
may upgrade or add to domestic water system facilities within District rights-of-way
and easements, but each request to do so must first be approved by the District, such
approvals to not be unreasonably denied. All joint use District rights-of-way and
easements are listed in EXHIBIT "9.1".
~,.EASE OF PROPERT'Y•
At the request of Town, District will offer to lease for the term of this
Agreement, a portion of the Disirict-owned property on the Frontage Road in Marana
for agreed upon Town functions, reco,gnizing the District has a continued need to use a
portion of the property as a service and storage yard. During the term of a mutually
agreeable lease, Town will retain fust right of refusal to match any offer the District
may receive in consideration for purchase of the property, should the property become
surplus to the needs of the District.
~ ~IS1'ILiCT PIPEL.~R UNDER I-10-
Without additional monetary consideration, Town shall have the right to enter
into a license with District to place a twelve (12) inch sleeve in the thirty (30) inch
CRP under I-10 upon re~sonable terms and conditions mutually acceptable to the
Parties and consistent with the DistricY s agreements wifih the Arizona Department of
Transportation and ADOT rules and regulations.
30
IQ63~ ~5~~
~
4 RELOCATION OF STANDPIPE:
Within a reasonable period of time, not to exceed twelve (12) mont6s, Town
will relocate the standpipe from in front of the District shopyard to another location to
be selected by Town. The District has the option to elect to retain the existing
standpipe facility and water meter in the present location for District use and be
charged by Town at the standard rate for a water connection (meter) of that size.
Q~ FIBBR OPTICS:
Town and District recognize the potential value to the community of fiber
opdcs communication and would negotiate to jointly share in ownerslup, costs and
revenues or license or franchise fees on a pro rata basis determined by the number of
feet of right-of-way owned by District and the number of feet of right-of way owned
by Town for fiber optics cable laid in water line trenches and within District right-of-
way.
~ I)ISTRICT EMPLOYEES AFFECTED BY THIS AGREE~VIENT:
In consideration of their experience, capabilities and qualifications, District
employees whose employment will be affected by execution of this Agreement, if any,
shall be given preferential consideration for employment by Town in addition to but
not in violation of any eusting law, rule and regulation. The Aut6orized
Representatives, as one of their initial obligations, shall make every reasonable effort
to effect the transfer of affected District employees to employment with Town.
PART TEN - ZBRM_ RATIFICATION, RECORDING, NOTICE
~ T~RM OF THIS AGREEMENT:
Tlus Agreement shall run until the year 2020. Five (5} years prior to
expiration, Town and District will commence meeting to renegotiate this Agreement.
If an extended agreement cannot be renegotiated, all wells, well-sites and water rights
held in the Trust for the benefit of Town will become the sole and separate property of
Town at the end of this Agreement; provided however, to the extent Town, or its
agent, receives municipal water deliveries within the District from a source other than
Trust wells, and, pursuant to Section 4.3, is not required to pay District therefore,
then the Town shall request Disirict to produce water for those areas within the
District receiving such non-Trust well water at rates equal to those which woold have
been charged under this Agreement for a period at least eqnal to the period non-Trust
wells supplied the area without compensation to District. Town shall leave in Trust
those wells necessary for District to meet the request. Tlus provision shall survive
termination of the Agreement.
31
IC~~3~ ~597
~ ~ANCELLATION-
Pursuant to A.R.S. § 38-511 this Agreement under certain circumstances may
be cancelable. Either Party, pursuant to A.R.S. ~ 38-511, as amended, may cancel
any contract to which it is a party within three (3) years after its eaecution, without
penalty or further obligation, if any person significantly involved in initiating,
negotiating, securing, drafting or creating the contract of behalf of it is, at any time
while the contract or any extension thereof is in effect, an employee or agent of any
other party to the contract in any capacity or a consultant to any other party to the
contract with respect to the subject matter of the contract in the event a Party elects to
exercise its rights under A.R.S. ~ 38-511, as amended, the Party so electing agrees to
immediately give notice thereof to the other Party.
_1Q~.~ ~MENDMENTS- This Agreement and the E~ibits to this Agreement may be
amended by, and only by, a written instrument duly authorized and executed by each
Party.
~.Q
4 RECORi~LNG:
Town shall be responsible for recording this Agreement with the Pima County
Recorder in a manner consistent with A.R.S. ~ 11-952(G).
1~,
~ NU
fICIE:
Unless otherwise provided for in this Agreement, any notice, demand or request
provided for by this Agreement, or served, given or made in connection with it, shall
be in wridng and sha11 be deemed properly served, given or made when delivered in
person, by facsimile, by a qualified and recognized delivery service (such as the
United States Postal Service), or by any other means so long as there is written
confirmation that it was sent prepaid and addtessed as set forth below:
Cortaro-Marana irrigation Disirict
Cortaro Water Users Association
12253 West Grier Road
Marana, Arizona 85653
Town of Marana
13251 N. Lon Adams Road
Marana, Arizona 85653
Either Party may at any time, by written nodce to the other Party, change the
designation or address of the person so specified as the one to receive notices pursuant
to this Agreement.
32
~ Q~3~~ ~~J~~
PART .Ei_.F~IEN - INSLIRAN('F
1~._1 IN3URANCfi:
The Operating Committee shall annually review and determine the minimum
insurance required to be carried by the Parties under this Agreement and to confirm
that insurance coverage of both Town and District meet the minimum standards
required.
Town and District shall, at their own cost procure and maintain in force the
following types of operating insurance:
Adequate fue insurance, including extended coverage endorsement and
vandalism and malicious mischief coverage for all property owned by it now or at any
time during the term of this Agreement or any extension thereto.
Commercial General Liability Insurance, including bodily injury, personal
injury and property damage, automobile liability, and contractual liability with a
minimum of $1,000,000 per occurrence.
Employee Dishonesty Bond, covering employees engaged in services under this
Agreement.
Worker's Compensation as required by Arizona L.aw and Employer Liability
Insurance with minimum limits of $1,000,000 per occurrence.
In the event Town or District provides evidence satisfactory to the other of an
adequate and sufficient quality of self-insurance, Town or District may self-insure.
Nothing herein shall prolubit Town or District from self-insuring or combining
the coverages required by this Agreement with coverage outside the scope of that
required by this Agreement.
Town and District will maintain the aforesaid insurance policies acceptable to
the other Party as recommended by their respective staffs, consultants or insurance
underwriters. Each Party will hold the other Party harmless from liability pursuant to
Sections 12.19, 12.20 and 12.21 of this Agreement. The Authorized Representatives
will require Town and District to provide evidence of adequate insurance coverage for
property and personnel at joint-use well-sites, to include coverage to compensate for
negligent actions by employees of the other.
33
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PART TWEL.VE - MIS Fi LANEOUS
~2,~. i.~GAL AIITHO ITY• The Parties agree each is relying on the legal and
lawful authority of Town and District to perform their respective obligations under
this Agreement. By executing this Agreement, the signatories represent and warrant
they have been duly authorized to execute this Agreement on behalf of the Party for
whom they sign and, on that Party's behalf.
~ STATE ~iND FEDFRA . ~ AW ~F.OiJiREt~rFNTS• Through their Authorized
Representatives, the Parties shall review and implement and be govemed by required
laws, rules and regulations of appropriate jurisdictional entities, including those of
Town and District.
~ GOYERNLNC L.AW- This Agreement and the rights, duties and obligation of
the Parties hereto shall be governed and construed in accordance with the substantive
laws of the State of Arizona.
~44 LEGAI JU~S~iCTION • Nothing in this Agreement shall be considered as
either limiting or eatending the legal jurisdiction of either Town or District.
TLl1_+~~ OF ESSEN _F • Time is of the essence of this Agreement and each term,
provision and condition hereof.
~ WAIVER: The waiver by either Party of any breach or default of any term,
covenant or condition contained herein shall not be deemed a waiver of any other
term, covenant or condition or any subsequent breach or default of the same or any
other term, covenant or condition contained herein.
.~,Z BLNDLNC ~g~~• All terms, provisions and conditions hereof shall be
binding upon and enure to the benefit of all Parties hereto and their respective
representatives, successors and assigns.
CONSTRUGTION- Section headings and captions appearing with this
Agreement are for convenient reference only and in no respect define, limit or
describe the scope or intent of this Agreement, are the product of negotiation and the
Parties acknowledge that they have been represented and advised by counsel who has
participated in such negotiation and has reviewed documentation. None of such
documents shall be construed against a Party solely by reason of the preparation of
such documents by a Party's attomey.
~Q SURVIV i: This Agreement and all representadons and warranties herein
shall survive and not be merged in the execution and delivery of this Agreement. The
provisions of Section 2.2.5 shall survive termination of this Agreement
34
~'fl~?~~ ~~~3~
12.10 SEVERABILITY: Unenforceability of any provision of this Agreement shall
not limit or impair t6e operation or validity of any other provision, excepting Sections
2.2, 4.2.1 through 4.2.5 and 4.3 which, if found to be unenforceable, shall render the
entire Agreement void and of no force and effect. Unless the Patties mutually agree
otherwise within six (6) months of entry of a final nonappealable such Secdons are
unenforceable.
12_ll ENTIRE AG EMFNT• This Agreement, and the other dceuments
contemplated hereby or described herein which are or have been or shall be executed
by the Parties hereto, accurately and completely reflect the mutual understanding of
the Parties hereto and thereto as to all matters addressed herein and therein and there
exist no agreements or understandings, written or oral, between the Parties and no
expectations which are not specifically set forth herein.
1Z_12 ENFORCE1bLENT• In the event of breach, t6e Party in default hereunder shall
bear the costs of the Parties who are successful in enforcing this Agreement, including
reasonable attomey's fees, whether or not an acdon is actually filed.
12.13 AMFND~_N'j' ~ND W VER- No amendment or waiver of any provision of
this Agreement shall in any event be effective unless the same shall be in writing and
signed by the Parties; and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
12_14 ~UITIONAL DOCt)Mi~NT4 AN ACTS• The Parties hereto shall execute,
acknowledge, if applicable, and deliver such additional documents and do such other
acts as may be reasonably required to fully implement the intent of this Agreement.
12_15 USE OF PUR _HASF PRi['_F• It is intended this Agreement shall aot be an
element of value in any real property purchase by Town, by the State, or by any entity
using pump taac revenues from District or any District landowner.
12.I6 ~SOLUTION OF DISp~~'rFS• Should any dispute arising between the
Parties conceming the terms or conditions of this Agreement or the duties or
obligations of the Parties under this Agreement or the implementation or interpretation
of this Agreement remain unresolved for a period of three (3) months, such dispute
shall be first forwarded for reconciliation to the General Manager of the District and
the Manager of Town (hereinafter "Manager" and "Managers"), and failing resolution
it shall be forwarded to the Mayor of Town and the President of the District, who
shall meet wit6in thirty (30) days (or such shorter or longer time as agreed upon
between the respective representatives) to discuss and attempt to reach a resolution of
the dispute.
Any resolution mutually agreed upon by the respective Managers or
Representatives of the Parties shall be binding upon each of the Parties to this
35
Agreement. If the respecdve Managers or other representatives of the Parties cannot
resolve the dispute within thirty (30) days of its submission to them (or within such
longer time as shall be mutually agreed upon by the respective representatives of the
Parties) the Parties may pursue any remedies available to them at law, in equity or
under this Agreement to resolve the dispute.
12_17 DEFAULT AND BREA _H- In the event of a default by either Party for
failure to perform pursuant to t6e terms of t}us Agreement, eacept for failure by Town
to pay monies owed District for water service as described in PART FOUR, the non-
defaulting Party shall nodfy the defaulting Party of the default. Said notice (i) shall
be in writing and (ii) shall state the facts constituting default, including the date and
time (if possible) such default is deemed to have occurred, and (iii) shall further set
forth what action is necessary in the non-defaulting Party's opinion to cure the default.
If no cure is deemed possible by the non-defaulting Party, the notice shall so state.
The defaulting Party shall have a reasonable time from notice to cure the
default. In the event t6e default is not cured within such time, which shall not exceed
siacty (60) days, a Breach may be declared. Whether a Breach is declared or not, the
Parties shall meet at least once to attempt to resolve said differences. It is agreed that
during the time when the Parties are attempting to resolve their differences with
respect to an alleged default, the Parties shall continue to fulfill their obligations
under this Agreement and such continuance shall not in any way waive the default. If,
at the end of sixty (60) days from the date of notice of default, the Parties are unable
to resolve their differences, then the Parties or either of them may declare a Breach
and shall have all rights and remedies available to them under law, including specific
performaace, to effect the intents and purposes of this Agreement and its covenants.
12_18 COVENA~NT NOT TO EXE _i~~- Except for any judgement debt for
damage resulting from Willful Action, each Party hereby extends to the other Party,
its directors, members of its governing bodies, officers or employees, its covenant not
to execute, levy or otherwise enforce a judgement obtained against any of them
including recording or effecting a judgement lien, for any d'uect, indirect or
consequential loss, damage, claim, cost, charge or expense whether or not resulting
from the negligence of such Party, it directors, members of its governing bodies,
o~cers, employees, or any person or entity whose negligence would be imputed to
such Party from the performance or nonperformance of the obligations of such Pariy
under this Agreement, other than the obligation to pay any monies which have become
due.
12.19 PARTY CLAiMS- Except for liability resulting from Willful Action,
any Party subject to a third party claim or action for any death, injury, loss or damage
arising out of, in connection with or caused by the failure of another Party to perform
its duties and obligations under this Agreement shall be defended, indemnified and
held harmless by that other Party from and against any liability for such death, injury,
36
~ ~~J~~
loss or damage and the Party entitled to be defended, indemnified or held harmless
may bring action to enforce this provision.
12.20 LIABILITY FOR WILLFUL ACTION- Each Party shall be responsible for
any damage, loss, claim, cost, charge or expense that results from its own Willful
Action as defined in Section 12.22 and shall indemnify and hold harmless the other
Party, it directors, members of its governing bodies, officers and employees from any
such damage, loss, claim, cost, charge or expense.
12.21 ~.IMITATION OF LiABii TY• The liability of either Pariy to the other for
Wiliful Action shall be determined as follows:
12.21.1 imit rn~ i.~Ahit~t~- All such liability for damages, losses, claims,
costs, charges, or expenses of such Party shall not exceed $1,000,000 per occurrence.
Each Party hereby extends to the other Party, its d'uectors, members of its governing
bodies, officers and employees, its covenant not to eaecute, levy or otherwise enforce
a judgment obtained ~gainst the other Party for such liability in excess of $1,000,000
per occurrence.
The Parties agree that this liability limit of $1,000,000 referenced in this
Section and Section 11.1 may be determined in the future to be inappropriate and shall
make a good faith effort to evaluate and, if appropriate, revise said limit at the request
of either Party.
12 21 2 T'me for Fiting t~im~- A claim based on Willful Action must be
perfected by filing suit in a court of competent jurisdiction within three years after the
Willful Action occws. All claims made thereafter shall be baned by this Section
12.21 unless the act was actively concealed by the Party against whom the claim is
made, in which event the three (3) year period shall run from the time a reasonable
person should have become aware of the wilful action.
12.21.3 Imnact on incY.ra,ncP- The provisions of this Section 12.21 shall not
be construed so as to relieve any insurer of its obligation to pay any insurance
proceeds in accordance with the terms and conditions of aay valid insurance policy of
either Party.
12_22 WILLFUL ACTION - DEF N n-
Action taken or not taken by a Party at the direction of its directors, members
of it governing bodies, officers or employees having management or administrative
responsibility affecting its performance under this Agreement, which action (1) is
knowingly or intentionally taken with conscious indifference to the consequences
thereof or with intent that injury or damage would result or would probably resnlt
therefrom, or (2) has been determined by final arbitration award or final judgment or
37
~ ~~3~~
judicial decree to be a material default under this Agreement and which occurs or
continues beyond the dme specified in such arbitration award or judgment or judicial
decree for curing such defaulter, if no time to cure is specified therein, occurs or
continues thereafter beyond a reasonable time to cure such default, or (3) is knowingly
or intentionally taken or not taken with the knowledge that such action taken or not
taken is a material default under this Agreement.
The phrase "employees having management or administrative responsibility" as
used in this Section 12.22 means employees of a Party who are responsible for one or
more of the executive functions of planning, organizing, coordinatiung, directing,
controlling aad supervising such Party's performance under this Agreement.
Willful Action does not include any act or failure to act which is merely
involuntary, accidental or negligent.
12.23 UNCONTR4 -i A~ • FORC~• The term "Uncontrollable Forces" shall mean
any cause beyond the control of the Party unable to perform its obligation, eacept the
payment of money due, including, but not limited to, acts of God, failure or threat of
failure of facilides, explosions, flood, drought, earthquake, storm, fire, pestilence,
lightning and other natural catastrophes, epidemic, war, riot, civil disturbance or
disobedience, strike, labor disturbance, dispute or unrest of whatever nature, labor,
material or fuel shortage, sabotage, restraint by court order or public authority and
action or non-action by or inability to obtain the necessary authorizations or approvals
from any govemmental agency or authority, wluch by exercise of due diligence such
Party could not reasonably have been expected to avoid and which by exercise of due
diligence it has been unable to overcome.
Should the uncontrollable force provisions of this Agreement be invoked,
application is to be made as incrementally as possible, acknowledging this
Agreement's intent of preserving, to the fullest eatent DistricYs capacity to sell to
Town the total municipal water requirements within the District while at the same time
recognizing Town's requirement to operate in an efficient, continuous and reliable
manner.
Neither Party shall be considered to be in default in the performance of any of
its obligation hereunder when a failure of performance shall be due to Uncontrollable
Forces. The Party claiming failure of performance shall prompdy contact the other
Party and provide written notice that an Uncontrollable Force has caused failure of
performance.
Nothing contained herein sha11 be construed so as to require a Party to settle
any strike or labor dispute in which it may be involved.
38
~ Q~1~~ ~~7~4
12_24 ~IO THIRD PARTY RI HTS - NO DFni~ATION OF FA r rTiF~- The
Parties do not intend to create rights in or to grant remedies to any third party as a
beneficiary of this Agreement or of any duty, covenant, obligation or undertaking
established hereunder.
Any undertaking by one Party to the other Party under any provision of this
Agreement shall not constitute the dedication of the system or any portion thereof of
either Party to the public or to the other Party, and it is understood and agreed that
any such undertaking under any provision of this Agreement by a Party shall cease
upon the termination of its obligations hereunder.
12.25 t~S-SICN FNT - This Agreement shall enwe to the benefit of and be binding
upon the Parties thereto and their respective successors and assigns; provided,
however, that this Agreement may not be assigned by either Party, except with the
prior written consent of t6e other Party, which consent shall not be unreasonably
withheld.
12.26 LIyFOIZMATION EXC~LANG~ The Parties shall cooperate in the exchange of
information between themselves in order to further the purposes of this Agreement and
to verify compliance with the terms of this Agreement.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date set forth above.
BUYER:
TOWN OF MARANA
an Arizona municipal corporation
. -~,y
By: Mayor
ATTEST:
, -
-
~
Tow r
39
~~~~v ~~~~J
SELLERS:
CORTARO-MARANA CORTARO WATER USERS
IRRIGATION DISTRICT ASSOCIATION, an Arizona non-profit
corporation
an Inigation District and political
subdivision of the State of Arizona
By B ~
Its t ' I~ ~ '
ATTEST: ATTEST:
B ~ ~ •
Y B 7""
Y
S~CkGrT~k'Y S~GiP~ri9
The foregoing Intergovernmental Agreement has been reviewed pursuant to
A.R.S. § 11-952 by the public agencies' attomeys, who have determined that it is in
proper form and is within the powers and authority granted under the laws of the State
of Arizona to those parties the Agreement represented by e undersi ed.
,
y
Town Attomey Attomey for District
~:~t-~.u8,.
4~
{O~i3v ~~0~
~ X H I B I T S
Exhibit Description
1.4.18 Map of "District"
2.1 Asset Sales Agreement
2.2 Trust Agreement
2.2.1 List of District Wells Transferring to Trust
2.2.2 List of Town Wells Transferring to Trust
3.1.1 Town's Conditions of Service
4.2.3 Adjustments to Water Production Rates
5.1.5 Facilities, Equipment and Operational Responsibility at
Joint Use Well-sites
5.3 Depreciation/Amortization Factor
5.4 Method of Valuing Agricultural Welis Subsequently
Acquired by Town
6.1 Accounting and Billing
9.1 Joint Use Rights of Way and Easements
185\agmts\marana.iga\index.iga
V11
JQ~3~ 2~Q~
EXHIBIT 1.4.18
MAP OF DISTRICT
1~~3~
THE CORTARO-MARANA TRUST AGREEMENT
Dated the ~ day of 1997
ARTICLE I
Parties to this Trust Agreement:
Trustor I: Cortaro Marana Irrigation District, an
2Irrigation District organized and
existing under the laws of the State of
Arizona
Trustor II: The Town of Marana, Arizona, an Arizona
Municipal Corporation
Trustee: Cortaro Marana Irrigation District
Beneficiaries: [As specified and set forth in the IGA]
ARTICLE II
Related AQreement:
That certain Intergovernmental Agreement dated the
day of September, 1997 by and between the Town of Marana, Ariz na
and the Cortaro Marana Irrigation District (the "IGA").
ARTICLE III
Term of this Trust:
The term of this Trust ("Term") shall be for a period
running to and through the year 2020 or as otherwise specified in
the IGA.
ARTICLE IV
Purpose•
In accordance with and in furtherance of the Municipal
purposes expressed in the IGA, Trustor I transfers to Trustee all
property listed in Schedule A attached to this Agreement.
Trustee shall hold, manage, invest, operate and reinvest the
property transferred and distribute all such property and any
income therefrom according to the terms and provisions of the
IGA.
In accordance with and in furtherance of the Municipal
purposes expressed in the IGA, Trustor II transfers to Trustee
all property listed in Schedule B attached to this Agreement.
Trustee shall hold, manage, invest, operate and reinvest the
Page 1
~U~~
property transferred and distribute all such property and any
income therefrom according to the terms and provisions of the
IGA. (Trustor I and Trustor II may hereinafter be collectively
referred to as Trustors.)
ARTICLE V
Powers reserved bv Trustors:
(A) Trustors, to the extent consistent with the
provisions of the IGA, may revoke this Trust Agreement in whole
or in part and amend this Trust Agreement from time to time by
written instrument signed and delivered to Trustee, pr~vided that
the duties, liabilities and compensation of Trustee shall not be
materially changed without Trustee's written consent and provided
further that so long as the assets transferred to Trust are held
by the Trust, this Trust Agreement shall be irrevocable.
(B) Trustors retain the right for themselves and
others to transfer other property to Trustee in accordance with
the provisions of the IGA, all subject to future acceptance by
Trustee.
(C) Trustors, in accordance with the terms and
provisions of the IGA, reserve the right to direct Trustee as to
distributions of net income and principal.
(D) Any rights or powers reserved by Trustors are
personal and shall not be exercisable by any other person or
entity.
ARTICLE VI
Dispositive Provisions:
(A) During the Term of this Trust, Trustee shall
operate, manage and administer all Trust Property and shall
distribute any net income of the Trust in accordance with the
terms of the IGA.
(B) On the expiration of the Term of this Trust, and
any extensions thereof, Trustee shall distribute all of the trust
estate, including undistributed income and any subsequent
additions, all as provided for in the IGA.
(C) If or to the extent, the above provisions do not
provide for distribution of the Trust Estate, or any part
thereof, such interest shall be distributed free of Trust to
Cortaro-Marana Irrigation District.
Page 2
~D~~~ ~~27
AGREEMENT ~~R PURCHASE AND SALE
OF A PORTION OF THE MUNICIPAL WATER UTILITY ASSETS OF
THE CORTARO WATER USERS ASSOCIATION
AND THE CORTARO-MARANA IRRIGATION DISTRICT
THIS AGREEMENT FOR PURCHASE AND SALE OF CERTAIN MUNICIPAL WATER
UTILITY ASSETS (this "Agreement") is entered into this ~ day of T, 1997, by
and between the CORTARO WATER USERS ASSOCIATION., an Arizona non-profit
corporation ("CWUA"), the CORTARO-MARANA IRRIGATION DISTRICT, an irrigation
district and political subdivision of the State of Arizona ("CMID") collectively referred to as
the Sellers, and the TOWN OF MARANA, ("Town") an Arizona municipal coip~ration
("Buyer") .
WITNESSETH:
WHEREAS, Sellers are the present owner of certain municipal water plant and distribution
systems situated within the Town of Marana, Arizona; and
WHEREAS, Sellers desire to sell its municipal distribution systems used for providing retail
municipal water service; and
WHEREAS, Sell~,~-s further desire to retain ownership of its wells and water producing facilities
and serve as a wholesale water provider to the Tawn; and
WHEREAS, the Town desires to consolidate ownership of municipal water systems within and
without its town limits; and
WHEREAS, the Town desires to acquirE Sellers' municipal distribution systems and business
located within the town limits of Buyer; and
WHEREAS, the Town and Sellers have entered into a separate Intergovernmental Agreement
dated the day of 1997 ("IGA") which is fully incorporated herein by this
reference as if set forth in full and to which this Agreemerit is attached as Exhibit 2.1; and
WHEREAS, the Mayor and Council of the Town of Marana have by Resolution No. E~~
authorized the execution of the IGA, including this Agreement, to which Resolution the IGA,
including this Agreement, is an exhibit; and
WHEREAS, the board of directars of Seliers have authorized the execution of the IGA, including
this Agreement;
NOW, THEREFORE, in consideration of the foregoing Recitals, and the mutual promises,
covenants and agreements hereinaf±er cantained, and each act of the parties hereto, the parties
agree as follows:
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Section 1. Definitions.
Unless the context clearly indicates the contrary, the following words used in the Recitals and
used below shall have the meanings set forth in the IGA and below:
Accounts Receivable: Any right for the payment to Sellers for services or goods provided
or rendered, whether or not evidenced by an instrument or chatrPl paper, arising out of or in any
way related to the provision of municipal water service prior to Closing.
Agreement: This Agreement for Purchase and Sale of Municipal Water Utility Assets.
Assets: Collectively, the Real Property and Personal Property owned and used by Sellers
in connection with the provision of municipal water service, excluding wells, and to be purchased
by Buyer pursuant hereto. The Assets to be sold by Sellers and purchased by Buyer pursuant to
this Agreement are set forth in Exhibits AA 2.3 and AA 2.1 attached hereto.
Bill of Sale: That certain document to be given by Sellers to Buyer conveying all of its
interest in and to the Personal Property of Sellers to Buyer pursuant to this Agreement and set
forth in Exhibit 2.1 attached hereto.
Buyer: TOWN OF MARANA, a municipal corporation.
Escrow A,gent: First American Title Insurance Company, 1880 E. River Road, Tucson,
Arizona 85718.
Permitted Encumbrances: Those matters of record set forth on Schedule B of the
Preliminary Title Report and such other matters approved in writing by Buyer.
Personal PropertX: All water mains, pipelines, meters, booster pumps, storage tanks,
reservoirs, valves and other appurtenances (excepting therefrom wells) customer accounts, records,
reports, and other personal property used by Sellers in providing municipal water utility service
and purch~Lstd by Buyer pt~rsuant to this Agreement, as set forth on Exhibit AA 2.1 attached
hereto and made a part hereof. Accounts receivable as of the date of Closing shall remain the
property of Sellers.
Real PropertX: All easements, rights-of-way, licenses and other real property interests
located in Pima County, Arizona, legally described in Exhibit AA 2.3 attached hereto, including
all Improvements, Fixtures and any other rights and appurtenances pertaining thereto which are
used by Sellers in the provision of municipal water service located within and without Marana,
excepting therefrom all well-sites owned by Sellers.
Purchase Price: The sum of SIX HUNDRED THOUSAND DOLLARS ($600,000.00)
which, together with the production agreement contained in the IGA, is the purchase price for
the Assets as set forth under Section 3 of this Agreement.
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Records: All of Sellers' outstanding service agreements, and service and repair records,
water treatment records, Department of Water Resources filings and correspondence, customer
data base information (including master file information, billing histories, complaints), meter
reading information, and other related documents arising out of or in any way relating to the
Assets for a period of up to three (3) years prior to the date of this Agreement, unless another
time period is agreed to by the Parties.
Sellers: CORTARO WATER USERS ASSOCIATIOr:, an Arizona non-profit corporation
and the CORTARO-MARANA IRRIGATION DISTRICT, an Irrigation District and political
subdivision of the State of Arizona.
Title Insurer: First American Title Insurance Company, 1880 E. River Roa~, Tucson,
Arizona 85718.
Transfer Instruments: Those instruments customarily required for the transfer of the
Assets, including, but not limited to:
(i) Quit Claim Deed, easernent or license for Real Property to be conveyed;
and
(ii) Bill of Sale to all personal property.
Water Rights: Means the Central Arizona Project Municipal and Industrial Subcontract
and service area rights associated with the municipal water service and facilities being purchased
by Buyer by this Agreement. The Water Rights shall be transferred by assignment of all water
rights, together with completion and filing of all forms required by the Arizona Department of
Water Resources. The Water Rights subject to transfer by this Agreement are listed on Exhibit
_ attached hereto and made a part hereof.
Section 2. ConveXance of Assets.
Subject to the conditions and limitations set forth herein, Sellers hereby agree to sell and
Buyer hereby agrees to purchase the Assets "AS IS" and without Warranty, either express or
implied, as to the condition thereof or the fitness for a particular purpose except as expressly set
forth in Section 5.1 hereof.
2.1 Personal PropertX.
The Personal Property shall be conveyed at Closing by the execution and delivery by Sellers of
the Bill of Sale in the form set forth on Exhibit AA 2.1 attached hereto, which includes as
Exhibit "A" thereto, a list identifying all Personal Property being transferred pursuant to this
Agreement.
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2.2 Contract Ri~.
To the extent that any person shall be required to consent to the transfer of Contract Rights, then
Sellers shall make a good faith effort to obtain that consent in writing as a condition of Closing.
2.3 Real PropertX.
Buyer shall receive a right to utilize the Real Property, subject to the same conditions and
restrictions applicable to Sellers and subject to Permitted Encumbrances. The Real Property
subject to this Agreement and the form of documentation to be provided is set forth in Exhibit
AA 2.3 hereof and incorporated herein by this reference.
2.3.1 Title Insurance. Buyer, at its sole cost and option, may secure at Closing a
standard owner's title insurance policy in the amount up to the value of the Real Property,
but not exceeding $ 600,000, insuring Buyer's interest in the Property, subject only to
those exceptions described in section 2.3 above.
2.3.2 Title Defects. In the event the Title Insurer is unable or otherwise refuses to issue
said title insurance policy to Buyer as of the date of Closing, subject only to the matters
described and approved, then Buyer shall have the right, at Buyer's sole election, to
terminate this Agreement within fifteen (15) days of receiving notice thereof from the
Title Insurer and receive a full refund of all money on deposit, with any accrued interest
thereon, and Buyer shall have no further obligation hereunder. In the alternative, Buyer
may elect to close this transaction and waive the objectionable item.
2.3.3 Condition of Title. Sellers shall preserve title to the Property and at the time of
Closing shall deliver the Property in substantially as good condition with respect to title
as of the date of the Preliminary Title Report.
2.4 Limitations.
The purchase of the Assets pursuant hereto shall not constitute a purchase of Sellers by Buyer
nor render Buyer a successor in interest to Sellers except for rights acquired by Buyer arising out
of contract which are expressly assigned to Buyer hereunder. This Agreement is limited to the
purchase and sale of Assets only and Buyer is not assuming any liabilities of Sellers with respect
to the Assets which may exist at any time prior to their transfer, except for those conditions,
restrictions and liabilities arising out of the agreement, contract, document or other action under
which Sellers' rights are derived.
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Section 3. Purchase Price.
3.1 Purchase Price.
Buyer agrees to pay Sellers as the Purchase Price for Sellers' interest in the Property, the sum
of SIX HUNDRED THOUSAND DOLLARS ($600,000.00) payable as follows:
3.1.1 Cash at Closin~. Buyer sha?1 deposit the sum of SIX HUNDRED THOUSAND
DOLLARS ($600,000.00), in cash ar other certified funds, at Closing (subject to
adjustment for costs and prorations as set forth herein).
An integral part of the Purchase Price is the performance of the Parties of the IGA and in
particular Part Four thereof. Therefore, a breach of the IGA shall constitute a breach of this
Agreement.
Section 4. Intergovernmental Agreement Contingenc~
4.1 Contin e~
n~.
Buyer's and Sellers' obligations under this Agreement are contingent upon Buyer and Sellers
entering into a separate Intergovernmental Agreement consistent with the Memorandum of
Agreement entered into previously between the parties on or before September 20, 1997. This
deadline may be extended by mutual written agreement of the parties. In the event the parties
have not entered into the Intergovernmental Agreement by the deadline (and as it may be
extended), the Escrow Agent is directed to refund the principal amount of the payment made by
the Town into escrow, plus all accrued interest, less all charges by the Escrow Agent for opening
and administering the escrow, to the Town.
Section 5. Representations and Warranties By Sellers.
5.1 Sellers' Representations.
Sellers hereby represent and warrant to Buyer that based Sellers' actual knowledge, but
without undertaking any further investigation, the following are believed to be true:
5.1.1 Seisin. Sellers are the owner of and has good and marketable title to the Assets
to be conveyed hereunder.
5.1.2 Disclosed A~reements. Except for this Agreement, Sellers have entered into no
agreement currently in effect to sell the Assets.
5.1.3 Liabilities. Sellers have no actual knowledge of any judgments, liens, actions or
proceedings pending against Sellers or the Assets which would adversely affect this
transaction or the title which Buyer will receive, other than as set forth in the Preliminary
Title Report.
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5.1.4 Liens. No judgments, liens, security interest or other monetary obligations against
the Assets will be outstanding at the time of Closing, except Permitted Encumbrances and
current real estate taxes which are not yet due and payable.
5.1.5 Labor, Materials. All bills and invoices for labor and materials furnished to or on
behalf of the Assets which have been incurred by Sellers prior to the time of conveyance
and transfer to Buyer, if any, will be paid and acknowledged in writing as paid by the
laborer or supplier, as the case may be.
5.1.6 Proceedin~s. Sellers do not have actual knowledge of any actions or proceedings
by any governmental entity or any other facts or circumstances, including any causes of
action, lawsuits or claims, whether existing or threatened, which might materially and
adversely affect the Assets.
5.1.7 No Breach. Neither the execution and delivery of this Agreement nor the
consummation of the transaction contemplated by this Agreement will result (either
immediately or after the passage of time and/or the giving of notice) in a breach or
default by Sellers under any agreement or understanding to which Sellers are a party or
by which Sellers may be bound or which would have an effect upon Sellers' ability to
fully perform its obligations under this Agreement.
5.1.8 No Bankruptcy. Sellers have not (a) made a general assignment for the benefit
of creditors, (b) filed any voluntary petition or suffered the filing of an involuntary
petition by Sellers' creditors, (c) suffered the appointment of a receiver to take all, or
substantially all, of Sellers' assets, (d) suffered the attachment or other judicial seizure of
all, ar substantially all, of Sellers' assets, or (e) admitted in writing its inability to pay its
debts as they fall due, and no such action is threatened or contemplated.
5.1.9 Best Actual Knowled~e. All information prepared by Sellers and provided or to
be provided by Sellers to Buyer and all representations by Sellers are accurate to the best
of Sellers' actual knowledge without Sellers having made any specific investigation
thereof; as to all other information provided or to be provided by Sellers to Buyer, Sellers
know of no inaccuracies.
5.1.10 Re~ulations. To the best of Sellers' actual knowledge, there are currently no
violations of any applicable zoning regulatian or ordinance or other law, order, ordinance,
rule, regulation or requirement, or of any covenant, condition or restriction affecting or
relating to the use or occupancy of the Property from any governmental agency having
jurisdiction over the Property or from any other person entitled to enforce the same.
5.1.11 Condemnation. To the best of Sellers' knowledge, there are no pending or
threatened condemnation or eminent domain proceedings which would affect the Property.
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5.1.12 Creditors. Except as set forth in Section 7, all bills and invoices for goods and
services related to or which are a part of the Assets, if any, shall be paid; all Creditors
shall be paid; all employees (if any) and salaries, wages, bonuses, vacation pay and
benefits accrued up to the date of Closing; all withholdings, payroll taxes, unemployment
insurance, worker's compensation benefits, and all other similar payments shall be paid
current to the date of Closing; and no claims by Creditors shall exist which may encumber
the Assets.
5.1.13 Or~anization. Sellers have been duly formed and presently exist as an Arizona
non-profit corporation and/or irrigation district and have the full right and authority to
enter into this Agreement, to consummate the sale contemplated herein and to observe and
perform all of their covenants and obligations hereunder. The persons executing this
Agreement and any other document required hereby has full authority to act on behalf of
and to bind the Sellers in and to the obligations imposed on it by this Agreement.
5.1.14 Commissions. Sellers and Buyer represent to each other that there are no real
estate commissions or brokerage fees in connection herewith.
5.1.15 Department of Water Resources ("DWR"). Buyer shall have no responsibility
for any liability of Sellers assessed by DWR under the First or Second Management Plans
throu~h date of Closin~.
5.2 Buyer's R~resentations.
Buyer hereby represents to Sellers as follows:
5.2.1 Authoritv. Buyer has been duly formed and presently exists as a municipal
corporation under the laws of the State of Arizona, and the entering into of this
Agreement and the performance of Buyer's obligations hereunder have been duly
authorized by all proper and necessary actions, and do not violate any applicable
governmental statute, rule, regulation, ordinance, cor~tract or other restriction. The person
executing this Agreement and any other documents required hereby has full authority to
act on behalf of and to bind the Buyer in and to the obligations imposed on it by this
Agreement.
5.2.2 Commissions. Buyer has made no agreements respecting commissions or
brokerage fees in connection herewith.
Section 6. Indemni~cation.
6.1 Sellers.
Sellers shall indemnify, defend and hold Buyer harmless against and in respect of:
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6.1.1 Any damage or deficiency prior to Closing resulting from any misrepresentation,
breach of warranty, or nonfulfillment of any agreement on the part of the Sellers
hereunder or from any misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished to the Buyer under this Agreement; and
6.1.2 All actions, suits, proceedings, demands, assessments, judgments, costs and
expenses incident to any of the foregoing or any obligations, claims or liabilities of Sellers
in connection with the Assets transferred hereunder arising out of Sellers' provision of
municipal water service prior to the date of Closing.
Buyer shall promptly notify Sellers in writing of any claim, act or notice which could give
rise to a claim of indemnification under this Agreement. Buyer shall not settle, pay or
confess judgment with regard to such claim if Buyer receives from Sellers within fifteen
(15) days after the aforesaid notice of such claim a statement in writing by Sellers that
Sellers will diligently defend the claim. If Sellers desire to contest the claim, they shall
do so at their sole cost and expense without reimbursement of the defense as reasonably
required by Buyer. If Sellers shall fail to successfully contest a claim as provided for
above; pay a claim or final judgment rendered against it; or remove any lien or attachment
within ten (10) days after imposition, then Buyer may, but shall not be obligated to, pay
any such claim, judgment ar lien. In the event of such payment by Buyer, Buyer shall
be entitled to an offset in the amount so paid by Buyer, plus costs, actual attorneys' fees
and costs, and interest at the legal rate in connection therewith. In the event Buyer claims
any such affset hereunder, Buyer shall so notify Sellers in writing. This provision shall
survive Closing.
6.2 Buyer.
Buyer shall indemnify, defend and hold Sellers harmless against and in respect of:
6.2.1 Any costs, expenses, damages or deficiencies resulting from any misrepresentation,
breach or warranty or nonfulfillment of any Agreement on the part of Buyer hereunder
or from any misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished to Sellers under this Agreement;
6.2.2 All actions, suits, proceedings, demands, assessments, judgments, costs and
expenses incident to any of the foregoing or any obligations, claims or liabilities of Sellers
in connection with the Assets transferred hereunder arising out of Buyer's provision of
municipal water service after the date of Closing.
Sellers shall promptly notify Buyer in writing of any claim, act or notice which could give
rise to a claim of indemnification under this Agreement. Sellers shall not settle, pay or
confess judgment with regard to such claim if Sellers receive from Buyer within fifteen
(15} days after the aforesaid notice ~f such claim a statement in writing by Buyer that
Buyer will diligently defend the claim. If Buyer desires to contest the claim, it shall do
so at its sole cost and expense without reimbursement from Sellers and shall keep Sellers
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advised as to the status of the defense as reasonably required by Sellers. If Buyer shall
fail to successfully contest a claim as provided for above; pay a claim or final judgment
rendered against it; or remove any lien or attachment within ten (10) days after
imposition, then Sellers may, but shall not be obligated to, pay any such claim, judgment
or lien. This provision shall survive Closing.
Section 7. Escrow Agent.
7.1 Closin~A e~nt.
The Escrow Agent shall serve as the Closing Agent for this transaction.
7.2 Delivery of Transfer Instruments.
The Transfer Instruments and any other documents required by this Agreement or applicable laws
shall be placed by the parties into escrow with the Escrow Agent and shall be delivered to the
appropriate party upon Closing.
7.3 Other.
The Escrow Agent agrees to do all things reasonably required by the terms of this Agreement to
close this transaction.
Section 8. Closing Date.
The Closing of this sale shall take place on or before the lst day of September, 1997 . In the
event the contingency of the Intergovernmental Agreement has not been satisfied before
September 1, 1997, then the Closing Date and the proration date may be extended to a date
mutually agreeable to the parties, expressed in a written agreement of the parties to extend the
Closing.
Section 9. Closing Documents.
9.1 Seller's Deposits.
Prior to Closing, Sellers shall deposit in escrow for delivery to Buyer, the following:
9.1.1 The Transfer Instruments required by this Agreement.
9.1.2 Any other documents or instruments required by this Agreement.
9.2 Buver's Deposits.
Prior to Closing, Buyer shall deposit in escrow for delivery to Sellers the following:
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9.2.1 All sums required of Buyer to close this transaction.
9.2.2 Such Transfer Instruments as are required of Buyer.
9.2.3 Any other instruments necessary to or reasonably required by Sellers to effectuate
the transaction contemplated herein.
Section 10. Costs.
Costs of Closing and or expenses connected with the transfer of the property and the sale thereof
shall be divided between Buyer and Sellers, and paid through escrow, as follows:
10. 1 Attorneys' Fees.
Each party shall pay its own attorneys' fees and costs.
10.2 Escrow Fees.
The escrow fee and all filing and recording fees shall be divided equally between Buyer and
Sellers, to the extent that such recording fees or filing fees are for the Transfer Instruments. If
any recording fees or filing fees are necessary as a result of recordings required to clear title, they
shall be paid by Sellers.
10.3 Title Insurance.
The premium for the standard title insurance policies required to be provided by this Agreement
shall be paid by Buyer.
Section 11. Prorations.
All of the following in 11.1 and 11.2 shall be prorated as of date of Closing.
11.1 Taxes.
All current real estate and personal property taxes against the Assets. Any delinquent taxes,
penalties and interest thereon for the Assets shall be paid by Sellers on or before Closing.
11.2 Assessments.
All current assessments, both principal and interest, against the Assets. Any delinquent amounts
shall be paid by Sellers on or before Closing.
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Section 12. Risk of Loss.
12.1 Prior to Closin~.
The risk of loss or damage by fire or other casualty, or the taking by eminent domain, until
Closing, shall be assumed by and shall be the responsibility of Sellers. Upon the happening of
any material loss and within ten (10) business days after notification thereof, Buyer may elect in
writing to terminate this Agreement or close the sale. If any election to terminate the Agreement
is made, any money on deposit shall be returned to Buyer with accrued interest thereon and this
Agreement shall thereupon become null and void. In the alternative, if an election to proceed
with Closing is made by Buyer, any insurance proceeds and/or condemnation award in connection
with the loss shall be given to Buyer up to, but not exceeding, either the fair market value of the
lost, damaged or taken property or $600,000, whichever is lower, and there shall be no
adjustment to the Purchase Price.
12.2 After Closin~.
The risk of loss or damage by fire or other casualty, or the taking by eminent domain, shall be
assumed by Buyer after the Closing Date.
Section 13. Assignment of Agreement.
The rights of any party under this Agreement are not assignable without the written consent of
the other party, which may be withheld with or without cause.
Section 14. Default.
14.1 Non-Monetary Default.
For the purposes of this Section 14, a"Non-Monetary Default" shall mean the failure of Sellers
to close this transaction after Buyer has tendered fu11 performance when that failure is the result
of any bona fide action by a third party encumbering the Property by creating a cloud on the title
which is not practicably susceptible to financial satisfaction prior to Closing and which did not
exist when the Preliminary Title Report was received by Buyer.
14.2 Monetary Default.
For the purpose of this Section 14, a"Monetary Default" shall mean the failure of Sellers to close
this transaction after Buyer has tendered full performance, when that failure is a result of a
monetary lien or encumbrance upon the Property, wnich lien or encumbrance was not disclosed
in the Preliminary Title Report when received by Buyer and which can be cured by the
application of a portion of the Closing proceeds.
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14.3 Sellers' Willful Refusal.
For the purpose of this Section 14, "Sellers' Willful Refusal" shall mean the failure of Sellers to
close this transaction, without cause, after Buyer has tendered full performance.
14.4 Remedies.
In the event of a Default by Sellers, Buyer's exclusive remedies shall be as follows:
14.4.1 In the event of a Non-Monetary Default, Buyer shall have ten (10) business days
following such default in which to elect in writing to terminate this Agreement or waive
the Non-Monetary Default and close this transaction. In the event Buyrer elects to
terminate this Agreement, any money on deposit shall be returned to Buyer, with all
interest thereon, and this Agreement shall thereupon be null and void. If Buyer elects to
waive the Non-Monetary Default and close the transaction, then the sale shall close within
ten (10) business days after Buyer's written notice to close. There shall be no adjustment
in the Purchase Price and Buyer shall accept whatever title Sellers may be able to convey.
If Sellers still refuses or is unable to close, then Buyer may elect to pursue Buyer's legal
and equitable remedies.
14.4.2 In the event of a Monetary Default, the Escrow Agent is hereby instructed to
withhold from Sellers' proceeds from the Closing a sufficient amount to cure the
Monetary Default.
14.4.3 In the event of Sellers' Willful Refusal, then Buyer shall be entitled to pursue its
legal and equitable remedies as they may be available at law.
14.5 Buyer's Default.
In the event Buyer fails to close this transaction, Sellers shzll be entitled to pursue all their rights
and remedies at law and in equity. The parties specifically agree that the provisions of A.R.S.
§ 33-741, et s~. shall not apply to this Agreement.
Section 15. Employees.
15.1 No Emplo~ees.
Buyer will not assume the responsibility to emplay any of Sellers' employees, but shall give full
and fair consideration to hiring such employees when filling positions for the Buyer's Water
Utility.
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Section 16. Miscellaneous Provisions.
16.1 Notices.
All notices and communications hereunder shall be in writing and shall be given by personal
delivery or mailed first class, registered or certified mail, postage prepaid, and shall be deemed
received upon the earlier of actual delivery or one hundred twenty (120) hours after deposit in
the United States Mail as aforesaid. Notices to Sellers or Buyer as the case may be shall be
delivered or mailed to the addresses set forth below. In addition, a copy of the notice shall be
mailed or delivered to the Escrow Agent in care of the address set forth in Section 1.
Cortaro-Marana irrigation District
Cortaro Water Users Association
12253 West Grier Road
Marana, Arizona 85653
Town of Marana
13251 N. Lon Adams Road
Marana, Arizona 85653
16.2 Nature of A~reement.
16.2.1 Agreement Ne otiated. The terms and provisions of this Agreement represent the
results of negotiations between Sellers and Buyer, each of which has been represented by
counsel or the representation of its own choosing and none of which have acted under
duress or compulsion, whether legal, economic or otherwise. Consequently, the terms and
provisions of this Agreement shall be interpreted and construed in accordance with their
usual and customary meanings, and Sellers and Buyer hereby waive the application of any
rule of law which would otherwise be applicable in connection with the interpretation and
construction of the Agreement, including (withc~ut ? imitation) any rule or law to the effect
that ambiguous ar conflicting terms or provisions contained in this Agreement shall be
interpreted or construed against the party whose attorney prepared the executed draft or
any earlier draft thereof.
16.2.2 Inte rag tion. All understandings and agreements heretofore had between the parties
are merged into this Agreement which alone fully and completely expresses their
agreement; the same is entered into after full investigation and neither party is relying
upon any statements or representatiorls by the other not embodied in this Agreement.
16.2.3 Other Inducements: The parties agree that there are no promises, inducements,
representations or agreements in connection with this Agreement except those specifically
set forth herein in writing and including the Intergovernmental Agreement.
16.2.4 Modification. This Agreement may not be changed orally, but only by an
agreement in writing, signed by the parties.
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16.2.5 Other A~reements. Sellers shall not enter into any contracts, leases, agreements
or amendments to existing agreements or encumbrances affecting the Property while this
Agreement remains in force or subsequent to Closing of this transaction without the
express written consent of Buyer, other than to remove a matter which the Title Insurer
required be removed to Close.
16.3 Relation of Parties.
16.3.1 No A~encv. It is expressly agreed and understood by the parties hereto that
neither party is the agent, partner, nor joint venture partner of the other. It is also
expressly agreed and understood that neither Sellers nor Buyer has any obligations or
duties to the other except as specifically provided for in this Agreement.
16.4 AttorneXs' Fees.
If any party defaults hereunder, the defaulting party shall pay the other party's reasonable
attorneys' fees, expert witness fees, travel and accommodation expenses, deposition and trial
transcript costs, costs of court and other similar costs or fees paid or incurred by the nan-
defaulting party by reason of or in connection with the default (whether or not legal or other
proceedings are instituted). In the event any party hereto finds it necessary to bring an action at
law or other proceeding against the other party to enforce any of the terms, covenants or
conditions hereof or any instrument executed pursuant to this Agreement, or by reason of any
breach hereunder, the party prevailing in any such action or proceedings shall be paid all costs
and reasonable attorneys' fees by the defaulting party, and in the event any judgment is secured
by such prevailing party, all such costs and attorneys' fees shall be included in any such
judgment, with attorneys' fees to be set by the court and not by the jury. In the event the parties
elect to arbitrate a dispute, then this section shall also apply to arbitration, except that the
provisions referring to a court shall refer to the arbitrator.
16.5 Construction.
16.5.1 Time. Time is of the essence in this Agreement. However, if any action is
required to be taken on a Saturday, Sunday or legal holiday, the action shall be deemed
timely taken if it is taken on the next regular business day.
16.5.2 Headin~s. The headings of this Abreement have been inserted for convenience
of reference only and are to be ignored in any construction of the provisions hereof.
Whenever a personal pronoun is used in any one gender, it shall be deerned to include all
other genders as the case may require, and the singular shall include the plural, and vice
versa, unless the context indicates to the contrary.
16.5.3 Adverbs. Whenever the terms "herein", "hereunder", "hereof", "therefore",
"thereover", or similar terms are used, they shall refer to this entire Agreement as a whole
and shall not refer solely to any particular section.
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16.5.4 Exhibits. All recitals, schedules and exhibits to this Agreement are fully
incorporated herein as though set forth at length herein.
16.5.5 State Law. This offer and the contract and conveyance provided for herein if it
is accepted shall be governed by the laws of the State of Arizona.
16.5.6 Counterparts. This Agreement may be executed in counterparts, and the signature
of any person required by this Agreement shall be effective if signed on any and/or all
counterparts. All counterparts together shall be considered one and the same Agreement.
Section 17. Bulk Sale Requirements.
In lieu of compliance with Article 6(Bulk Transfers) of the Arizona Commercial Code, A.R.S.
§ 47-6101 et. s~., the parties agree as follows:
17.1 Indemnif ication.
As set forth above, Sellers has agreed to convey the Assets free of the Claims of any Creditors.
Therefore, in the event that any Creditors make any claim against the proceeds of this transaction
or seek to set aside this transaction, then Sellers shall indemnify, defend and hold Buyer harmless
from any such Claims, as set forth under Section 6. 1, above.
17.2 Buyer Not Liable for Sellers' Debts.
The parties hereto specifically agree that this Agreement shall not create any liability or
obligation on the part of Buyer for any of Sellers' debt or obligations except specifically provided
for herein. Accordingly, all such accrued debts must be paid in full as of Closing if they arose
as a result of the purchase of the Assets to be transferred hereunder.
Section 18. Inspection, Acceptance and Maintenance ~f Assets.
18.1 Buyer.
Buyer acknowledges that as of the date of this Agreement, it will have inspected the condition
of such of the Assets as it deems reasonably necessary, and accepts the Assets in such condition,
subject to Section 5 of this Agreement.
18.2 Sellers.
Sellers agree to maintain the condition of the Assets in their current condition, ordinary wear
excepted, as to the date of Closing.
]5
10~~~ ~~23
Section 1.9. Customer Deposits, Line E..tensian Agreements, Meter Readin~, And Other
Transitional Matters.
19.1 Customer Deposits. Sellers shall transfer all refundable customer deposit funds (including
customer security deposits and meter deposits), if any, to Buyer at Closing, and provide Buyer
with full and complete records of the nanzes of the parties having made such deposits. Buyer
shall assume all responsibilities for custorner deposits at Closing.
19.2 Line Extension A~reements. Buyer shall assume all responsibilities relating to payment
of line extension agreement refunds based. on revenues received after Closing.
19.3 Meter Readin~s. Closing of this Agreement is intended to occur at the end of a meter-
reading cycle, with the Sellers reading meters the day before Closing. Sellers shall render its
final bills and be responsible for collectins; all accounts receivable therefrom. Town of Marana
shall cooperate with Sellers in collection r~f ar~~ounts receivable, and, for a period of sixty (60)
days following Closing, shall, if requested by Sellers, discontinue water service to any former
customer of Sellers for non-payment of a bill for water service prior to Closing.
19.4 +"Jther Transitional Matters. Other transitional matters shall be resolved between Buyer
and Sellers via written documentation, approved i~;~ `!~e Town Manager and the Sellers' manager.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date set forth
above.
BUYEF2:
TOWN OF MARANA
an Arizona municipal corporation
C.- " c^xs2.,
By: Mayor
ATTES APFROVED AS TO FO
n- ~
/
own_ ov~n Att ey
16
EQ~3~ ~~~4
SELLERS:
CORTARO-MARANA CORTARO WATER USERS
IRRIGATION DISTRICT ASSOCIATION, an Arizona non-profit corporation
an Irrigation District and political
subdivision of the State of Arizona
B G~~%~~ B ~
Y
Its RE i~~JT Its R~S ~ DgN i-
ATTEST: ATTEST:
~~ce!~,~ B 02%Cvy T o~;~/
By Y
.S~'C~P ~?Ry ..5~'~~B
APPROVF ° -fl ORM:
i ,
By ~ri~
CMID Attorney
185\marana. iga\f nl-asse.ag
17
1 D~~~~ `~~2J
ARTICLE VI
Distribution Qualifications:
(A) Trustee is not to recognize any transfer,
mortgage, pledge, hypothecation, assignment or order of a
beneficiary, other than the Trustors, which anticipates the
payment of any part of the Trust Estate.
ARTICLE VIII
Powers and Duties of Trustee:2
(A) With respect to the Trust created by this
Agreement, and the property of such Trust, Trustee shall have all
powers given Trustee by law and all powers which may be exercised
by individuals owning similar property in their own right,
subject to the provisions of the IGA. Without restricting the
generality of the foregoing, the following powers are set forth,
by way of illustration of the extent of powers granted and not by
way of limitation, to be exercised from time to time by Trustee
in Trustee's discretion as necessary to carry out the provisions
of the IGA.
1. To receive additions to any Trust established
under this Agreement from any source, and to administer such
additions according to the terms of this Agreement and the IGA;
2. To retain indefinitely without liability for
loss any property or interest in property received in kind by
Trustee as an addition to the Trust Estate regardless of degree
of risk, effect on diversification or unproductivity of the
asset;
3. To sell, exchange, lease, grant options to
purchase and execute contracts concerning Trust Property for such
considerations and upon such conditions and payment terms as
Trustee may determine;
4. To invest and reinvest trust funds from time
to time;
5. To hold any property in Trustee's name as
Trustee or in the name of a nominee;
6. To participate in the management of business
enterprises; to participate in any organization or reorganization
of a business enterprise committing and transferring trust assets
or funds for such purposes2; to deposit or transfer securities to
protective or voting committees or similar bodies; and to
exercise any options, execute any documents and delegate
authority to act in Trustee's behalf in furtherance of any of
these activities;
Page 3
~Q~~~
7. To operate, improve or develop real estate; to
construct, alter, raze, or repair buildings or structures on real
estate; to partition, subdivide, dedicate to public use, grant
easements or other rights with respect to or otherwise deal with
real estate;
8. To employ and compensate attorneys,
accountants, brokers, agents and custodians;
9. To pay all costs and expenses of the Trust and
its property, including reasonable compensation to Trustee for
Trustee's services;
10. To arbitrate, settle, compromise, contest,
foreclose, extend or abandon claims or demands in favor of or
against the Trust or its assets;
11. To allocate receipts and disbursements
between principal and income on a reasonable basis giving
consideration to Trustee's usual custom and the Arizona principal
and income statutes as may be in effect from time to time in
making Trustee's determination; to establish reserves out of
income if Trustee sees fit, for depreciation of property,
depletion of natural resources and anticipated expenses;
12. To enter into any transaction authorized by2
this Article with Trustees or personal representatives of other
trusts or estates in which any beneficiary of this Trust
Agreement has an interest, even though Trustee also serves the
other trust or estate in a fiduciary capacity; and in any such
transaction to purchase property, or make loans on notes secured
by property, even though similar or identical property
constitutes a large proportion of the balance of the Trust
Estate, and to retain any such property or note as if it had been
received in kind as an addition to the Trust Estate;
13. To determine the market value of any
investment for any purpose 2on the basis of such quotations or
information as Trustee deems pertinent and reliable;
14. To make any distribution or division of the
Trust Property in cash or in kind, or both, and to allocate or
allot specific assets among or to beneficiaries in accordance
with the IGA.
(B) No person dealing with, making payments to, or
delivering property to Trustee shall be obliged to inquire as to
the powers of Trustee nor to see to the application of any money
or property delivered to Trustee.
(C) Until Trustee shall have written notice of any
event or the existence of any document upon which the right to
payments under this Agreement may depend, Trustee shall incur no
Page 4
~~~4
liability for disbursements made in good faith to persons or
entities whose interest may have been affected by that event or
by the existence of such documents.
(D) Trustee may at any time and from time to time
petition any appropriate court to have trust accountings
judicially settled.2
(E) Trustee may resign a2t any time by giving thirty
(30) days' written n2otice to each beneficiary. On such
resignation, the Successor Trustee shall become the Trustee.
ARTICLE IX
Successor Trustee:
In the event that the Trustee shall resign or otherwise
refuse to act as Trustee pursuant to this Agreement, the Trustee
shall appoint a Successor Trustee which appointment shall be
binding provided such Successor Trustee consents, in writing, to
comply with this Agreement and the provisions of the IGA as they
relate to the Trustee. In the event no Successor Trustee is
appointed by Trustee, then the owners of the majority lands
within the Cortaro-Marana Irrigation District shall appoint a
Successor Trustee, which appointment shall be binding provided
such Successor Trustee consents, in writing, to comply with this
Agreement and the provisions of the IGA as they relate to
Trustee.
Any Successor Trustees or alternate Successor Trustees
shall have and enjoy all of the same powers, duties and
responsibilities as the original Trustee under this Agreement.
ARTICLE X
Interpretations:
(A) No significance is to be attached to the use of
singular or plural designations or the use of the masculine,
2feminine or neuter gender in this Agreement. Each designation
or gender shall be construed to include the others where
appropriate.
(B) Any successor to Cortaro-Marana Irrigation
District, whether by reorganization or otherwise shall become and
be Trustee with like effect as though originally named as
Trustee.
(C) This Trust Agreement shall be construed under and
regulated by the laws of the State of Arizona as now or hereafter
in effect and to be consistent therewith and to fulfill the
purposes for which the Trust was created as reflected in the IGA.
In the event any portion hereof is determined to be void or
unenforceable the remainder shall remain in full force and
effect.2
Page 5
~a3~J
IN WITNESS WHEREOF, Trustors have hereunto set their
hand and Trustee has set its hand hereto, all on the date first
above written.
TRUSTOR I
CORTARO MARANA IRRIGATION DISTRICT,
an Irrigation District organized
and existing under the laws of the
State of izona
By:
Its : St CiVT
ATTEST:
By: ~ '
se~~~,p ~P y
TRUSTOR II
THE TOWN OF MARANA, ARIZONA, an
Arizona Municipal Corporation
; p` /7
By:
I t s : ~~-~j
. ~ APPROVED AS TO ~
, ~ r ` -
_ ~ ~ rk Town Attorney
_ TRUSTEE
CORTARO MARANA IRRIGATION DISTRICT,
an Irrigation District organized
under the ws of the State of
Arizona
By: ~
z t S: ,~~eEs, r
SUCCESSOR TRUSTEE
CORTARO WATER USERS ASSOCIATION,
an Arizona Non-Profit Corporation
By : e~y~ .
Its: '~1QC~S~DL~i~JT
185\agmts\marana.iga~trust.fnl
Page 6
j~G4J '~3I
SCHEDULE "A"
TO
CORTARO-MARANA TRUST AGREEMENT
PARCEL 1- Otherwise referred to as "CMID Well 22.1" and/or a
domestic wellsite used by CMID's Marana System:
That certain parcel or tract of land lying in the Northeast
quarter of the Southwest quarter of Section 22, Township 11
South, Range 11 East, Gila and Salt River Base and Meridian, Pima
County, Arizona, more particularly described as follows:
COMMENCING at the Northwest corner of said Northeast quarter of
the Southwest quarter of Section 22;
RUN THENCE North 89 degrees 38 minutes 30 seconds East, along the
interior quarter line of said Section 22, a distance of 689.03
feet to a point on a line parallel to and 420 feet from the
center line of the Southern pacific Railroad right-of-way;
RUN THENCE South 49 degrees 50 minutes East, along said line
parallel to the Southern Pacific Railroad right-of-way, a
distance of 505.50 feet to the TRUE POINT OF BEGINNING of the
parcel herein described;
RUN THENCE South 49 degrees 50 minutes East, a distance of 120
feet to a point;
RUN THENCE South 40 degrees 10 minutes West, a distance of 60
feet to a point;
RUN THENCE North 49 degrees 50 minutes West, a distance of 120
feet to a point;
RUN THENCE North 40 degrees 10 minutes East, a distance of 60
feet to the TRUE POINT OF BEGINNING;
EXCEPTING therefrom any part lying within Avra Street as such
street is shown on the plat of Marana Estates Subdivision No. 1
as recorded in Book 9 at page 85 of Maps and Plats in the Office
of the County Recorder of Pima Gounty, Arizona.
PARCEL 2- Otherwise referred to as "CMID Well 28.2" and/or
domestic wellsite used by CMID's Marana System:
The South 50 feet of the North 355 feet of the East 110 feet of
the Northeast quarter of the Northeast quarter, Section 28,
Township 11 South, Range 11 East, Gila and Salt River Base and
Meridian, Pima County, Arizona.
4 ~
~ i.l~v~ ~l~ ~
EXCEPT that portion lying within Sandario Road and as shown on
Book 2 of Road Maps at Page 173.
PARCEL 4- Otherwise referred to as "CMID Well 17P2" and/or a
domestic wellsite used by CMID's La Puerta Del Norte System:
The West 100 feet of the North 100 feet of Lot 147, of LA PUERTA
DEL NORTE SUBDIVISION, according to the plat of record in the
office of the County Recorder of Pima County, Arizona, recorded
in Book 15, of Maps, Page 76 thereof.
PARCEL 6- Otherwise referred to as "CMID Well 8.1" and/or a
domestic wellsite used by CMID's Falstaff System:
That portion of the Southwest Quarter of the Northeast Quarter of
the Southeast Quarter of Section 8, Township 12 South, Range 12
East, Gila and Salt River Base and Meridian, Pima County,
Arizona, more particularly described as follows:
COMMENCING at a point on the North right-of-way line of Avra
Valley Road (As established by Proceedings No. 760-A of the Board
of Supervisors of Pima County, State of Arizona) the map of which
is filed in the Office of the County Recorder of Pima County,
State of Arizona, in Book 6 of Roads at Page 43 thereof, which
point is 383.5 feet Westerly (south 89 degrees 48 minutes 14
seconds West~ from the intersection of said North right-of-way
line of Avra Valley Road with the East line of said Section 8 and
which point is the most Easterly corner of that property
described in Docket Book 1799 at Page 227 thereof;
THENCE North 39 degrees 11 minutes 15 seconds West along the
Northeasterly line of said property described in Book 1799 at
Page 227, a distance of 56.3 feet to a point;
THENCE North 54 deqrees 02 minutes 30 seconds West along the
Northeasterly line of the property described in Book 1799 at Page
227, a distance of 450.00 feet to the TRUE POINT OF BEGINNING;
THENCE South 35 degrees 57 minutes 30 seconds West, a distance of
70.0 feet to a point;
THENCE North 54 degrees 02 minutes 30 seconds West, a distance of
60.0 feet to a point;
THENCE North 35 degrees 57 minutes 30 seconds East, a distance of
70.00 feet to a point on the Northeasterly property line of said
property described in Book 1799 at Page 227;
THENCE South 54 degrees 02 minutes 30 seconds East, along said
Northeasterly property line a distance of 60.0 feet to the TRUE
POINT OF BEGINNING.
ls5\agmts\marana.iga\trustx.sch
2
l~'~~~:5 ~~33
~CHEDULE 'B'
TO
CORTARO-MARANA TRUST AGREEMENT
PARCEL 1- The Honea East Wellsite, a Domestic Wellsite used by
Marana's Honea System: That portion of the Northeast Quarter of
Section 33, Township 11 South, Range 11 East of the G. & S. R. B. &
M., Pima County, Arizona, being more particularly described as
follows:
COMMENCING at the Southwest Corner of the Northeast Quarter of
the Southwest Quarter of the Northeast Quarter of said Section 33;
THENCE North 89 deg. 24 min. 26 sec. East along the South line of
said Northeast Quarter of the Southwest Quarter of Northeast Quarter
of said Section 33, a distance of 140.00 feet to the Southeast corner
of Cactus Country Racing Pigeon Club Parcel, Tucson, Arizona, Inc.
Docket 1975, Page 3, Pima County Recorders, ALSO BEING THE TRUE POINT
OF BEGINNING;
THENCE North 00 deq. 29 min. 07 sec. West along the East line of
said Cactus Country Racing Pigeon Club Parcel, also being parallel
with the West line of the said Northeast Quarter of the Southwest
Quarter of Northeast Quarter of Section 33, a Distance of 150.00 feet;
THENCE North 89 deg. 24 min. 26 sec. East along a line parallel
with the South line of the said Northeast Quarter of the Southwest
Quarter of Northeast Quarter of Section 33, a distance of 93.80 feet;
THENCE South 00 deg. 29 min. 07 sec. East, along a line parallel
with the said Cactus County Racing Pigeon Club Parcel, a distance of
150.00 feet to a point on the said South line of the Northeast Quarter
of the Southwest Quarter of the Northeast Quarter;
THENCE South 89 deg. 24 min. 26 sec. West 93.80 feet to the TRUE
POINT OF BEGINNING.
PARCEL 2- The Honea West Wellsite, a Domestic Wellsite used by
Marana's Honea System: Lot 51 of Honea Heights, a subdivision of Pima
County, Arizona, according to the map or plat thereof of record in the
Office of the County Recorder of Pima County, Arizona, in Book 12 at
Page 58 thereof.
PARCEL 3- The Picture Rocks Wellsite, a Domestic Wellsite used by
Marana's Picture Rocks 5ystem: That portion of the NE 1/4 of the
NW1/4 of Section 34, T 12 S, R 12 E of the G&SRB&M, Pima County,
Arizona, more particularly described as follows:
BEGINNING at a 2" open iron pipe set in concrete at the N 1/4 of
said 5ection 34;
THENCE South 0 degrees 30 minutes 03 seconds East along the
midsection line of Section 34, 152.90 feet to the TRUE POINT OF
BEGINNING;
THENCE continuing South 0 degrees 30 minutes 03 seconds East
50.00 feet;
THENCE South 89 degrees 57 minutes 00 seconds West 50.00 feet;
THENCE North 0 degrees 30 minutes 03 seconds West 50.00 feet;
THENCE North 89 degrees 57 minutes 00 seconds East 50.00 feet to
the TRUE POINT OF BEGINNING.
185\agmts\marana.iga\trustB.sch
l~~~v ~~3~
EXHIBIT 2.2.1
DISTRICT WELLS TRANSFERRING TO TRUST
PARCEL 1- Otherwise referred to as "CMID Well 22.1" and/or a
domestic wellsite used by CMID's Marana System:
That certain parcel or tract of land lying in the Northeast
quarter of the Southwest quarter of Section 22, Township 11
5outh, Range 11 East, Gila and Salt River Base and Meridian, Pima
County, Arizona, more particularly described as follows:
COMMENCING at the Northwest corner of said Northeast quarter of
the Southwest quarter of Section 22;
RUN THENCE North 89 degrees 38 minutes 30 seconds East, along the
interior quarter line of said Section 22, a distance of 689.03
feet to a point on a line parallel to and 420 feet from the
center line of the Southern pacific Railroad right-of-way;
RUN THENCE South 49 degrees 50 minutes East, along said line
parallel to the Southern Pacific Railroad right-of-way, a
distance of 505.50 feet to the TRIIE POINT OF BEGINNING of the
parcel herein described;
RUN THENCE South 49 degrees 50 minutes East, a distance of 120
feet to a point;
RUN THENCE South 40 degrees 10 minutes West, a distance of 60
feet to a point;
RUN THENCE North 49 degrees 5Q minutes West, a distance of 120
feet to a poin~;
RUN THENCE North 40 degrees 10 minutes East, a distance of 60
feet to the TRUE POINT OF BEGINNING;
EXCEPTING therefrom any part lying within Avra Street as such
street is shown on the plat of Marana Estates Subdivision No. 1
as recorded in Book 9 at page 85 of Maps and Plats in the Office
of the County Recorder of Pima County, Arizona.
PARCEL 2- Otherwise referred to as "CMID Well 28.2" and/or
domestic wellsite used by CMID's Marana System:
The South 50 feet of the North 355 feet of the East 110 feet of
the Northeast quarter of the Northeast quarter, Section 28,
Township 11 South, Range 11 East, Gila and Salt River Base and
Meridian, Pima County, Arizona.
IQ6~u ~~i35
EXCEPT that portion lying within Sandario Road and as shown on
Book 2 of Road Maps at Page 173.
PARCEL 4- Otherwise referred to as "CMID Well 17P2" and/or a
domestic wellsite used by CMID's La Puerta Del Norte System:
The West 100 feet of the North 100 fee~ of Lot 147, of LA PUERTA
DEL NORTE SUBDIVISION, according to the plat of record in the
office of the County Recorder of Pima County, Arizona, recorded
in Book 15, of Maps, Page 76 thereof.
PARCEL 6- Otherwise referred to as "GMID Well 8.1" and/or a
domestic wellsite used by CMID's Falstaff System:
That portion of the Southwest Quarter of the Northeast Quarter of
the Southeast Quarter of Section 8, Township 12 South, Range 12
East, Gila and Salt River Base and Meridian, Pima County,
Arizona, more particularly described as follows:
COMMENCING at a point on the North right-of-way line of Avra
Valley Road (As established by Proceedings No. 760-A of the Board
of Supervisors of Pima County, State of Arizona) the map of which
is filed in the Office of the County Recorder of Pima County,
State of Arizona, in Book 6 of Roads at Page 43 thereof, which
point is 383.5 feet Westerly {south 89 degrees 48 minutes 14
seconds West) from the intersection of said North right-of-way
line of Avra Valley Road with the East line of said Section 8 and
which point is the most Easterly corner of that property
described in Docket Book 1799 at Page 227 thereof;
THENCE North 39 degrees 11 minutes 15 seconds West along the
Northeasterly line of said property described in Book 1799 at
Page 227, a distance of 56.3 feet to a point;
THENCE North 54 degrees 02 minutes 30 seconds West along the
Northeasterly line of the property described in Book 1799 at Page
227, a distance of 450.00 feet to the TRUE POINT OF BEGINNING;
THENCE South 35 deqrees 57 minutes 30 seconds West, a distance of
70.0 feet to a point;
THENCE North 54 degrees 02 minutes 30 seconds West, a distance of
60.0 feet to a point;
THENCE North 35 degrees 57 minutes 30 seconds East, a distance of
70.00 feet to a point on the Northeasterly property line of said
property described in Book 1799 at Page 227;
THENCE South 54 degrees 02 minutes 30 seconds East, along said
Northeasterly property line a distance of 60.0 feet to the TRUE
POINT OF BEGINNING.
195\ag~E$\marana.iga\tru3tJ..sch ~
2
l~53~ ~~36
EXHIBIT 2.2.2
TOWN WELLS TRANSFERRING TO TRUST
PARCEL 1- The Honea East Wellsite, a Domestic Wellsite used by
Marana's Honea System: That portion of the Northeast Quarter of
Section 33, Township 11 South, Range 11 East of the G. & S. R. B. &
M., Pima County, Arizona, being more particularly described as
follows:
COMMENCING at the Southwest Corner of the Northeast Quarter of
the Southwest Quarter of the Northeast Quarter of said Section 33;
THENCE North 89 deg. 24 min. 26 sec. East along the South line of
said Northeast Quarter of the Southwest Quarter of Northeast Quarter
of said Section 33, a distance of 140.00 feet to the Southeast corner
of Cactus Country Racing Pigeon Club Parcel, Tucson, Arizona, Inc.
Docket 1975, Page 3, Pima County Recorders, ALSO BEING THE TRUE POINT
OF BEGINNING;
THENCE North 00 deg. 29 min. 07 sec. West along the East line of
said Cactus Country Racing Pigeon Club Parcel, also being parallel
with the West line of the said Northeast Quarter of the Southwest
Quarter of Northeast Quarter of Section 33, a Distance of 150.00 feet;
THENCE North 89 deg. 24 min. 26 sec. East along a line parallel
with the South line of the said Northeast Quarter of the Southwest
Quarter of Northeast Quarter of Section 33, a distance of 93.80 feet;
THENCE South 00 deg. 29 min. 07 sec. East, along a line parallel
with the said Cactus County Racing Pigeon Club Parcel, a distance of
150.00 feet to a point on the said South line of the Northeast Quarter
of the Southwest Quarter of the Northeast Quarter;
THENCE South 89 deg. 24 min. 26 sec. West 93.80 feet to the TRUE
POINT OF BEGINNING.
PARCEL 2- The Honea West Wellsite, a Domestic Wellsite used by
Marana's Honea System: Lot 51 of Honea Heights, a subdivision of Pima
County, Arizona, according to the map or plat thereof of record in the
Office of the County Recorder of Pima County, Arizona, in Book 12 at
Page 58 thereof.
PARCEL 3- The Picture Rocks Wellsite, a Domestic Wellsite used by
Marana's Picture Rocks System: That portion of the NE 1/4 of the
NW1/4 of Section 34, T 12 S, R 12 E of the G&SRB&M, Pima County,
Arizona, more particularly described as follows:
BEGINNING at a 2" open iron pipe set in concrete at the N 1/4 of
said Section 34;
THENCE South 0 degrees 30 minutes 03 seconds East along the
midsection line of Section 34, 152.90 feet to the TRUE POINT OF
BEGINNING;
THENCE continuing South 0 degrees 30 minutes 03 seconds East
50.00 feet;
THENCE South 89 degrees 57 minutes 00 seconds West 50.00 feet;
THENCE North 0 degrees 30 minutes 03 seconds West 50.00 feet;
THENCE North 89 degrees 57 minutes 00 seconds East 50.00 feet to
the TRUE POINT OF BEGINNING.
185\agmt8\marana.iqa\truBtB.sch
=Q6~~ ~~~7
f
EXHIBIT 3.1.1
~ - Town's Conditions of Service -
CHAPTER 14 WATER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-1
Article 14-1 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-1
Section 14-1-1 Intent and Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-1
Section14-1-2 Definitions 14-1
Articfe 14-2 RESPONSIBILITiES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-2
Section 14-2-1 Responsibifities of the Councii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-2
Secfion 14-2-2 Water Utility Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-3
Section 14-2-3 Water Utility Advisory Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-4
Articie 14-3 WATER SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-5
Section 14-3-1 A~plication for Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-5
Section14-3-2 Deposits 14-5
Section14-3-3 Bond 14-8
Section 14-3-4 Grounds for Refusal of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-6
Section 14-3-5 Temporary Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-6
Section 14-3-6 Service Lines, Valves and Meters . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-6
Secfion 14-3-7 Easements and Rights-of-Way . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-7
Article 14-4 CONSTRUCTION AND FINANCING OF WATER FACILITIES . . . . . . . . . . . 14-7
Section 14-4-1 Agresments to Construct New Facilities . . . . . . . . . . . . . . . . . . . . . . 14-7
Section 14-4-2 Construction Other Than by Town . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-8
Section 14-4-3 Capacity Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-9
Article 14-5 SERVICE AREA INCLUSION AND FEES . . . . . . . . . . . . . . . . . . . . . . . . . . 14-10
Section14-5-1 Fees 14-10
Section 14-5-2 Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-10
Section 14-5-3 Approval Required for Inclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-10
Section 14-5-4 Effect of Inclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-10
Section 14-5-5 Service Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-11
Section 14-5-6 Data Requested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-11
Section 14-5-7 Inclusion Does Not Constitute 100 Year Water Adequacy 14-11
Article 14-6 PROVISION OF WATER UTILITY SERVICE . . . . . . . . . . . . . . . . . . . . . . . . 14-11
Section 14-6-1 Customer Responsibiiity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-11
Section 14-6-2 Payment of Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-12
Sectio~ 14-6-3 Grounds for Termination of Service . . . . . . . . . . . . . . . . . . . . . . . . . 14-12
Section 14-6-4 Non-Payment of Delinquent Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-12
Sectian 14-6-5 Reconnection of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-12
Marana Town Code ~ o~~~ G~~~IX rev. 2/96
Section 14-6-6 Chailenge of Accuracy of Water 8i11 . . . . . . . . . . . . . . . . . . . . . . . . . 14-13
Section 14-6-7 Deposit Requirement After Termination . . . . . . . . . . . . . . . . . . . . 14-13
Section 14-6-8 Termination Without Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-13
Section 14-6-9 Service Obligations of Town . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-14
Section 14-6-10 Meter Reading; Measurement of Service . . . . . . . . . . . . . . . . . . . . . 14-14
Section 14-6-11 Customer Requested Meter Re-Reads . . . . . . . . . . . . . . . . . . . . . . 14-15
Section 14-6-12 Customer Requested Meter Tests . . . . . . . . . . . . . . . . . . . . . . . . . . 14-15
Section 14-6-13 Biifing and Coliection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-15
Articie 14-7 WATER RATES AND CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-16
Section 14-7-1 Monthly Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-16
Section 14-7-2 Installation Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-17
Section 14-7-3 Other Service Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-18
A~ticle 14-8 EMERGENCY WATER CONSERVATION RESPONSE . . . . . . . . . . . . . . . 14-18
Section 14-8-1 Declaration of Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-18
Section 14-8-2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-18
Section 14-8-3 Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-19
Section 14-8-4 Decfaration of Water Emergency Authorized . . . . . . . . . . . . . . . . . . 14-19
Section 14-8-5 Implementation; Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-19
Section 14-8-6 Mandatory Emergency Water Conservatian Measures . . . . . . . . . . 14-20
Section 14-8-7 Variance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-20
Section 14-8-8 Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-20
Section 14-8-9 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-21
Article 14-9 V10LATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-21
Section 14-9-1 Installation and Repair by Individuals Prohibited . . . . . . . . . . . . . 14-21
Section 14-9-2 Turning on WaterkWthout Authority . . . . . . . . . . . . . . . . . . . . . . . . . 14-21
Section 14-9-3 Escaping Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-21
Section 14-9-4 Interference, Tampering With Facifities . . . . . . . . . . . . . . . . . . . . . . 14-22
Section 14-9-5 Damaging, Defacing Facififies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-22
Article 14-10 AMENDMENTS AND PUBLIC HEARING . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-22
Section 14-10-1 Amendment Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-22
Section 14-10-2 Public Hearing Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-22
Marana Town Code XX rev. 2/96
1063~ 2639
CHAPTERI4 WATER
Articie 14-1 GENERAL PROVlSIONS
Section 14-1-1 intent and Putpose ~
A. lt is the intent and purpose of the council, by adopting this chapter, to promote the health,
safety, order and generai weifare of the present and future inhabitants of the town, and
specificaliy to:
1. Provide for safe and reliabfe water utiiity service to the inhabitants of the town;
2. Provide for the financial integrity of the town water utility;
3. Protect the health, safety and welfare af tt~e inhabitants of the town;
4. Manage the water resources of the town to protect the existing inhabitants of the town and
to faci(itate the economic development of the town;
5. Develop water resources for the benefit of the inhabitants of the town;
6. Provide for the expansion and improvement to the town's water uti(ity system; and
7. Secure economy in municipal expenditures and faciiitate adequate provision of water
system capacity and improvement.
Section 14-1-2 Definitions
A. In this chapter, unfess the context otherwise requires:
1. "A~plicant" means a person requesting the town to supply water service.
2. "Appiication" means a request to the town for water service or service area inclusion, as
distinguished from an inquiry as to the avaifability or charge for such service or inclusion.
3. "Commodity charge" means the ur~it cost of billed usage, as set forth in the water rates and
charges.
4. "Contributions in aid of construction" means funds provided to the town water uti(ity by the
a~ppiicant under the terms of a main extension agreement or service connection agreement
the value of which are not refundable.
5. °Customer" means the person or entity in whose name service is rendered, as evidenced
by the name on the application or contractor for that service, or by tf~e receipt or payment
af bills regufariy issued in his name regardless of the identity of the actual user of the water
service.
6. "Distribution main" means a water main of the town water utility firom which service
connections may be extended to customers.
Marana Town Code ~{Z G~ O 14-1 rev. vss
U t1 U
7. "Main extensio~" means tf~e mains and anciilary equipment necessary to extend the
existing water distribution system to provide service to additional customers.
8. "Master meter" means a meter for measuring or recording t~e flow of water at a singfe
location where said water is transported through a piping system to tenants or occupants
for the+r individual consump6on.
9. "Meter" means the instrument for measuring and indicating or recording the volume of
water that has passed through it.
10. "Meter tampering° means a situation where a meter has been illegally altered. Common
examples are meter bypassing, use of magnets to slow the meter recording and broken
meter seals. ,
11. "Minimum charge° means the amount tt~e customer must pay for the avai{abifity of water
service, including 1,000 gallons of usage. .
12. "Person" means any individual, partnership, corporation, governmental agency or other
organization operating as a single entity.
13. "Point of delivery° means the point where facilities owned, leased or under license by a
customer connect to the town water utility's pipes or at the ouUet side of the meter.
14. "Premises" means all of the real property and apparatus employed by a single enterprise
on an integral parcel of land undivided by public streets, alleys or other rights-of-way or
easements.
15. "Service line" means a water line tfiat transports water from a common source (normally
a distribution main) of supply to the customers point of delivery.
Article 14-2 RESPONSIB(L1TlES
Section 14-2-1 Responsibilities of the Council
A. Appointments. The council shall be responsible for the appointment of a town water utility
director. The town manager shall appoint all such other personnel to fulfill the purposes of this
chapter.
B. Adootion of Comprehensive Water Develooment Plan. The council may adopt a
comPrehensive water system development plan for the town system or any part thereof. Upon
adoption of such a comprehensive water system development plan, the councif shall assure
that no extension, improvement or addition to the town water utility system or facilities over
which the town has jurisdiction shall be constructed or authorized until and unless the
extension, improvement or addition to the town water utility system or facilities shall be
determined to conform to said comprehensive water system development plan.
C. Adoption of Water Utility Construction Standards. The council shall be empowered to adopt
and amend engineering design and construction standards for improvements to, extension of,
additions to and modifications of the town water utili~y system.
Marana Town Code 2 6~~ 14-2 rev. 2/96
9 ~
D. Manaqement of Water System bv Indeoendent Contractor. The council may, at its sole option
and discre6on, provide that tfie management of ine town water utility system be accomplished
by the use of an independent contractor. In the event the councii determines tfiat it is in the
best interests of tfie inhabitants of the town to have the town's water utility managed by an
independent contractor, tfie council shall select bids and proposals from individuals and entities
with proven water utility management experience. Management fees are to be paid by the
town from water utility revenues for such management services.
E. Water Utiiity to be Enterorise Fund Based. There is estab(ished by this cha~ter a separate
water utility fund, and all monies paid to the town pursuant to provisions of this chapter for, but
not limited to, water service charges, fees, construction of facilities, fines and penalties shall
be deposited into the water utility fund, and all expenditures made by the town in relation to the
town's ownership, operation, maintenance, repair, expansion, acquisition, management,
salaries, professional fees, debt service, bond payments and ather costs and charges shall be
paid from tfie water utility fund. The town council is hereby empowered to make foans from
the general fund to tfie town water utility fund~from time to time to supplement revenues
generated by the town water utility in order to assure the 6mely payment of al! obfigations of
the water utility, provided that such loans are timely repaid from the water utiiity fund to the
general fund, together with interest It is hereby deciared to be the express policy and intent
of the town that the town water utility shall be a self-supporting utility funded solely from
revenues generated from utility operations. All fees and charges levied by the town in relation
to its water utiiity shall be, to the degree practical, based on the cost of providing the service
for which a fee or charge is levied. AII fe~s and charges levied and collected by the town shall
be unifoRn for the class of service or type of service provided throughout the water utility of the
town.
F. Amendments. The council may amend this code from time to time by simple majority vote of
the entire council membership at a public meeting of the council, subject to the requirements
of article 14-10.
Section 14-2-2 Water Utility Director
A. Duties. The director of the town water utifity shall have the duties and responsibilities as
determined by the council by resolution, in addi6on to those duties and responsibilities
enumerated herein. The director shall be responsible for the day-to-day management of the
town water system including, but not limited to, the inspection and repair of the water system,
sufficiency of water supply, enforcement of this chapter, review of all engineering plans, review
of all contracts, preparation of water system develoPment plans, improvement or expansion
plans, collection of all funds due to the town water utility, compliance with federal, state and
local health regulations, compliance with federal, state and local ordinances and requirements
in general, and preparation of annual budgets and preparation of capital improvement plans.
B. Terms. The director of the water utifity shall serve a term of appointment as determined by the
council and shall serve in such capacity at the pleasure and discretion of the council.
C. Compensation. The council shall provide, upon hiring the water utility director, the terms and
compensation to be provided by the town to such director.
Marana Town Code ~ U~^~ ~ ~ C t.~ 14-3 r~. ties
J U ~i
Section 14-Z-3 Water Utility Advisory Committee
A. reation. There is hereby established an entity to be calied the Marana Water Utility Acfvisory
Committee. Members shali be appointed by a majority vote of the mayor and councit.
B. Functions and Purooses. The functions, purposes, powers and duties of ine Marana Water
Utility Advisory Committee shal! be to:
1. Act as ttie official advisory body on water capital improvement program planning and rate
structure formulation to the council;
2. Annually review the proposed water system capital improvement program and recommend
to the council an annual and five year capital budget;
3. Annually review the water revenue requirements of the water utility and recommend to the
council rate adjustments as required;
4. Review and report to the council on the comprehensive water system development plan
and any long term (ten to fifty year) water source and capital needs of the water system,
utilizing staff of the town and other sources for the information necessary for such review;
5. Support and sponsor community programs and projects to provide information and
education to the community regarding the town water utiliry;
6. Review and make recommendations on proposed state and federal legisfation relating to
water;
7. Review and make recommendations on proposed acquisition of private water companies
and expansion of the water uti(ity service area;
8. Consult with the council from time to time as may be required by the council relative to
water related issues.
C. Membership Composition• Terms and Qualificafions. The Marana Water Utility Advisory
Committes shall be composed of seven members, two of whom shall be residential customers,
one of whom shall be a commercial customer, one of whom shall represent agricultural
interests and three of which shall represent areas of the town at large. Members of the water
utility advisory committee shall serve terms of three years, which terms shall be staggered.
The initial members of the water utility advisory committee shall draw lots to determine which
three members shall have an initial term of one year and which two members shall have an
initial term of three years. Thereafter members shall serve terms of three years.
D. Committee Orqanization. The Marana Water Utility Advisory Committee chairperson and a
vice-chairperson shall be selected by a majority of the committee members annually on the
second Manday of December and shall appoint their own executive committee, standing
committees and subcommittees and shall meet at such time and places as determined by the
committee.
E. Committee Reports. The Marana Water Utility Advisory Committee shall render to the council
an annual report on or before March 1 and send additional reports and recommendations as
Marana Tovm Code ~ ~ ~ ~ ~ [ } , ~ 1 `~-4 rev. 2196
j~
it determines or as requested by the town manager. Minutes of the committee shaii be filed
with the town cierk.
F. Limitation of Powers. Neither the Marana Water Uti(ity Advisory Committee nor any member
of the committee may incur town expenses without p~ior authorization of tfie councii, nor may
it obligate the town in any manner or form.
Ar~icle 14-3 WATER SERVICE
Section 14-3-1 Application for Service
A. Water utility service may only be provided pursuant to a written application on forms provided
by the town for that purpose. The town, as a condition precedent to approving an application
for water service to any premises, shall collect all installation and other charges required by
this chaptef. Ti~e to all pipes, fittings and other water facilities shall be and remain in the town.
Where service is requested by two or more individuals, the town shall have the right to collect
the fult amount owed for water utility service from any one of the applicants at the town's
discretion.
B. The following minimum information shall be required from each new app(icant for water utility
service:
1. Name of applicant;
2. Service address or location and telephone number;
3. Billing address and telephone number if different than service address;
4. Address where water service was provided previously;
5. Date applicant will be ready for service;
6. Indication of whether premises have been supplied with water utility service previously;
7. Purpose for which service is to be used;
8. (ndication of whether applicant is owner, tenant or agent for the premises.
Section 14-3-2 Deposits
A. Reouirement of Deoosit: Amount. The town may require a deposit from an applicant for
service not to exceed twice the average monthly bill for the account or in the case of a new
account, twice~ the estimated monthly bill, or in the case of an account which has shown
delinquency for three consecutive months as a condition of providing water service. A
separate deposit may be required for each meter installed. The town may review me
customer's water usage after service has been connected and adjust the deposit amount up
or down based on the customer's actual water usage.
B. Interest on Deposit; Refund of Deposit. Customer deposits shall be deposited in a bank
account of the town's choosing. No interest shall be paid to customers on deposits. The
individuaf in whose name the deposit is made shall be responsible for the payment of atl bills
Marana Town Code 14-5 rev. 2/96
~o~~v 2~44
incurred in connection with the service fumished. The guaranteed deposit is not negotiable
and can be redeemed onfy at the town water utility collection o~ce upon cfosing of the account
C. Use of Deoosit for Payment of Bili. Upan discontinuation of service, the deposit wiil be a~plied
by the town toward settlement of the account
Section 143-3 Sond
The town may, at its op6on, require a utility service bo~d in lieu of a cash deposit for commercial
and industrial appficants for service. Such ufility service bond shall be on a form approved by the
town attorney, and the town water utility director shall have the power to execute such bond on
behalf of the town. The provisions of sections 14-3-1 and 14-3-2 shall apply to utility service
bonds.
Section 14-3-4 Grounds for Refusal of Servic~
A. The town may refuse to estab(ish water utifity service if any of the following conditions exists:
1. The applicant has an outstanding amount due for water service with the town, and the
applicant does not bring current its outstanding bills;
2. A condition exists which in the town's judgment is unsafe or hazardous to the applicant, a
resident of the town or the town's personnel or facifities;
3. Refusal by the applicant to provide the town with a water utility deposit;
4. Failure of customer to furnish such funds, service, equipment or rights-of-way necessary
to serve the customer and which has been specified by the town as a condition for
providing water utility service;
5. Applicant provides false information for the purpose of obtaining service.
Section 14-3-5 Temporary Service
Applicants for temporary water service may be required to pay the town, in advance of seNice
establishment, the estimated cost of installing and removing the facilities necessary for furnishing
the desired service. The applicant may be required to advance a sum of money equal to the
estimated bill for service. Where the duration of service is to exceed one month, the applicant may
also be required to pay the deposit for service required by the town. Any service for a period of
more than sa months shall be deemed a permanent service, and provisions of this chapter relating
to permanent service shall apply.
Section 14-3-fi Service Lines, Valves and Meters
An applicant for water utility service shall be responsibfe for the cost of installing all customer piping
up to the meter. Where water service is be+ng provided for the first time or to a new customer, the
customer shall provide and maintain a private cutoff valve within eighteen inches of the meter on
the customer's side of the meter. The town may install its water meter at the property line or, at
the town's opfion, on the customer's property. Where the meter or service line location on the
customer's premises is changed at the request of the customer or due to alterations on the
Marana Town Code ~ a~~ Q 5 14-6 rev. 2J96
v
r
customers premises, the customer shall provide and have installed at his ex~ense all piping
necessary for relocating tfie meter, and me town may charge for moving me meter or service fine.
The custome~s lines or piping must be installed in such a manner as to prevent cross-connection
or backflow.
Section 14-3-7 Easements and Rights-of-Way
Each customer of the town water utility shali grant adequate easement or right-of-way satisfactory
to the town to ensure that customer's service connection is accessibie by the tovm. Failure on the
part of the customer to grant adequate easement or right-of-way shali be grounds for the town to
refuse water utility service. When tfie town discovers that a customer or his agent is performing
work or has constructed facilities adjacent to or within an easement or right-of-way and such work,
construction or facility poses a hazard or is in violation of federal, state or town laws, ordinances,
stat~tes, rules or regulations, or may significan~y interfere with the town's access to its water utility
facilities or equipment, the town shall notify the customer or his agent and shall take whatever
actions are necessary to eliminate the hazard, obstr.uction or violation at the custome~s expense.
Article 14-4 CONSTRUCTION AND FINANCING OF WATER FACILITIES
Section 14-4-1 Agreements to Construct New Facilities
A. Approval of Agreements to Construct New Facilities. The council may permit the construction
of water facilities to provide water service in areas where no water service is available, or
where existing water facilifies are inadequate in the sole opinion of the council to serve the
proposed new customers. Agreements for construction of water facilities shall provide that all
costs be at the sole expense of the applicant for service, except as otherwise noted in such
agreement. Costs shall inciude, but not be limited to, engineering and design fees, materials,
labor, applicable taxes, permits and inspection fees. Facilities shall include, but not be limited
to, wells, pumps, storage tanks and reservoirs, mains, valves, meters and other appurtenances
to the water system bott~ within an applicanYs proposed development as weil as outside the
development if such facilities are deemed necessary or desirable in the sole opinion of the
town to serve the new development. All agreements for the construction of water facilities shall
be subject to the final approval of the council. No agreement for the construction of water
facilities shall be submitted for approval by the council unless such agreement has been
reviewed and a~proved by the town attorney, and the engineering plans.have been approved
by the town engineer and the director of the town water uti(ity.
B. Main Extension Agreements. The applicant for the extension of mains shall be requi~ed to pay
to the town, as a non-refundable advance in aid of construction, before construction is
commenced, the esfimated cost of all mains, including all valves and fittings, and any water
production, storage or pressure system, all as deemed necessary and convenient by the town
to provide water service to applicant's property.
1. Upon request by a potential applicant for a main extension, the town water utility will
prepare a preliminary sketch and preliminary estimate of the cost of installation to be paid
by said applicant. The town reserves the right to require applicant to pay the casts of the
preliminary sketch and rough estimate. Any applicant for a main extension requesting the
town water utifity to prepare detailed plans, specifications or cost estimates shall be
required to deposit with the town an amount equal to the estimated cost of preparation and
review. The town .water utility shall, upon written request, make available to applicant
Marana Town Code ~ Q~~~ 14-7 rav. 2/96
_
within sixty days after receipt of the deposit referred to herein, such plans, specifications
o~ cost estimates of the proposed main extension. This depasit shali be non-refundabie.
2. In the event that tf~e town's actual cost of construction is more than me amount advanced
by the appiicant, the a~plicant shali pay t~e balance due to the town within thirty days after
the compietion af the construction.
3. Main extension agreements shall have the minimum following written requirements:
(i) Name and address of applicant;
(ii) Proposed service address;
(iii) Descripfion of requested service; ~
(iv) Description, if any, of the requested li~e extension;
(v) Itemized cost estimate to include materials, labor and other costs as necessary;
(vi) Payment terms;
(vii) A ciear and concise expfanation of any oversizing refund provisions, if applicable.
4. The size, design, type and quality of materials of the system, installed pursuant to
agreement with the town, locations in the ground and manner of installation, shall all be
specified by the town and shall be in accordance with the requirements of other public
agencies having authority therein.
5. All pipelines, valves, fittings, wells, tanks, reservoirs or other facilities installed by
agreement with the town shall be the sole property of the town, and parties making
advances in aid of construc6on under this chapter shall have no right, titie or interest in any
such facilities.
Section 14-4-2 Construction Other Than by Town
A. Construction. The council, at its sole discretion and option, may permit construction of water
facilities by private contract upon written application. The facilities will be constructed at the
sole expense and cost of the applicant within streets, avenues, alleys and rights-of-way
pursuant to grants of easements subject to payment of any excavation, permit or other fees
which are due to the town.
B. Approval of Construction Plans and Insqections. Plans for construction of water facilities to be
constructed other man by the town shall be provided by applicant, certified by a registered
professional engineer and approved by the town engineer and director of the town water utifity.
The construction of water facilities authorized and approved by the council will be inspected
by tf~e town engineer or his authorized representative and will comply in every respect with the
engineering, construction, material and installation standards of the town.
C. Construction AQreement. With each application for a permit far the construction of water
facilities authorized by this section, the applicant shatl execute and deliver to the director of the
town water utility, in duplicate, the agreement for construction thereof by private contract. If
Marana Town Code 14-8 rev. 2/96
~ ~b~t7
the agreement conforms with me provisions of this cha~ter, t~e town water utility director may
submit me agreement for approval to the council. The applicant shall further p~ovide a bond
in a form and in an amount satisfactory to the director before commencing any construction.
Section 14-4-3 Capacity Requirements
A. Water SYstem Caoacity Reauirements. The director of the town water utility may require an
applicant to install °on-site° or "off-site° water facilities of a size greater than is required to
provide service to applicant's development, referred to as oversizing.
B. Refunds. Refunds of the cost of oversizing shall be solely by agreement approved by the
council. Should a water distribution main insfialled pursuant to this section be installed in such
a manner as to provide water service to a property not participating in the construction cost,
(hereinafter referred to as "non-participating property°) the town may enter into an agreement
for partial refund of the cost of the water main so installed, subject to the following:
1. In no case will the agreed refunded amount exceed the total funds to be collected as
oversizing charges pursuant to this section;
2. Such refunds shall continue fo~ a maximum of fifteen years from the date of the agreement
Any balances remaining unpaid shall be considered canceled, and the town shall be fully
discharged from any further obligation under the agreement;
3. The amount of the annual refund shall not exceed ten percent of the gross revenue derived
from water sales from the benefitting but non-participating property;
4. In no event shall the town be liable to pay any interest on any amount of costs advanced
by an applicant which are agreed to be refunded by the town.
C. Oversizinc,~Recovery Charge. In lieu of annual refunds from the gross revenue derived from
water sales from the benefitting but non-participating property, the council may, at its sole
option, establish an "oversizing recovery charge" to be charged against non-participating
property for each subsequent connection by non-participating property owners made to or
benefitting from the water facilities previously paid for by a prior applicant, and provide by
agreement with the applicant funding the oversizing for refund of the oversized capacity costs
from revenues derived from said oversizing recovery charge.
1. The oversizing recovery charge shall be determined by computing the total cost of the
water facility improvement, determination of other property which will benefit from the
oversized capacity, allocation of the capacity installed between the original applicant's
property and any non-participating property benefitting from the capacity installed, and
de#ermination of a per connection pro rata cost share for the oversized capacity by meter
size of new connections. The per connection pro rata cost share for the oversized capacity
shall be the oversizing recovery charge.
2. No oversizing recovery charge shall be levied or collected by the town unless approved by
the council. No oversizing recovery charge shall be in effect for more than fifteen years.
3. Proceeds from an oversizing recovery charge authorized by the town to pay for oversized
capacity installed at the expense of an original app(icant shall be used to refund the
applicant's costs incurred for such oversizing. The town shall, on or before June 30th of
Marana Town Code 1~~*~ ~ 4~14-9 rB~. z~
~1
each calendar year, pay to the a~pficant pursuant to an approved refund agreement, tfie
p~oceeds coliected from the oversizing recovery charge a~piicable to appiicanYs water
system oversizing costs derived from non-~articipating property. At the end of fifteen years
from the date of ine agreement and effective date of ine appiicabie oversizing recovery
charge any batances remaining unpaid shall be considered cancei(ed, and me town shall
be fuily discharged from any furtf~er obiigation under the agreemen~
4. No interest shall be paid by the town for any amount agreed to be refunded pursuant to an
agreement under t~is section.
Article 14-5 SERVICE AREA INCLUSION AND FEES
Section 14-~-1 Fees
Any property owner wishing to have his property included in the water utiiity service area of the
town water utiiity system, in the event such property was not previously within the service area of
a public service corporation water utili~y purchased or acquired by the town or within the
boundaries of the Cortaro Water Users Association municipal water utility service area, shal( pay
the sum of five dollars ($5.00) per acre or fraction thereof for un-subdivided land, or two dolfars
($2.00) per piatted subdivision lot for property with a recorded subdivision plat, as a service area
inclusion fee.
Section 14-5-2 Application
Any property owner desiring to have his property included in the water utility service area of the
town shall apply for inclusion on the form provided by the town. The form shall require the name
of the property owner, a legal description of the property proposed to be incfuded and the
authorized signature of the owner of the property requesting approval, said signature
acknowiedged pursuant to A.R.S. §33-506. No app(ication for inclusion in the water utility service
area shall be considered unless the service area inciusion fee has been paid, and the required
information and autho~ized signature of the property owner has been provided.
Section 14-5-3 Approval Requi~ed fo~ Inclusion
A~plications for service area inclusion for property located within or without the incorporated iimits
~ of the town, but outside the boundaries of a water utility public service corporation or the Cortaro
Water Users Association municipal water service area, shall be subject to approvai by the director
of the town water utility upon completion of the required application and payment.of the service
area inclusion fee. Applications for service area incfusion outside of the incorporated limits of the
town shall be subject to the a~provai of the councif, which may, at its sole opfion, decli~e to
approve such inctusion without cause. In the event an appfication for service area inclusion
outside the incorporated limits of the town is rejected, the applicant's service area incfusion fee
shall be non-refundable.
Section 14-5-4 Effect of Inclusion
Inclusion in the water utility service area of the town shall entitle the property owner to make
a~plication for water utility service, subject to the provisions of this chapter including requirements
that applicant pay all costs for construction and installation of a water system. The service area
inclusion fee shall be in addition to other fees and charges required by the town to obtain water
service.
MaranaTown Code ~ ~ ~ ~ ~ ~ ~ ~ ~ 14-10 rev.2J95
Section 145-5 Servic~ Agreement
inclusion in the watef utiiity service area of the town by agre~ment daes nQt constitute an actual
water utility service agreement An appiicant for inclusion into tfie water utiiity service area of tfie
town need not simuitaneously apply for actua! water service nor enter into a water faci(ities
construction agreement However, an applicant for service area inclusion must provide t~e town
with any proposed development plans or subdivision plats the appficant may have to enable tfie
town to appropriately forecast its future water demands and include the property in its application
for an assured water supply designation. The town reserves the r"rght to require conveyance to the
town of wells, well sites, rights-of-way and easements as a condition of service to a new applicant
for service area inclusion.
Section 14-5-6 Data Requested
In the event the service area inclusion applicant has any hydrologic or well data concerning his
property, such data shalf be required to be prouided as part of the service area inclusion
application.
Section 14-5-7 Inclusion Does Not Constitute 100 Year Water Adequacy
Payment of the service area inclusion fee shall not be deemed as a guaranty that the town has
now o~ will be successful in the future in obtaining an assured water supply designation for the
town's water utifity service area, inciuding the applicant property, pursuant to A.R.S. §45-576.
Article 14-6 PROVISION OF WATER UT1L(TY SERVICE
Section 14-fi-i Customer Responsibiiity
A. Each customer of the town water utility shall be responsible for the following:
1. Maintaining all facilities on the customer's side of the point of defivery or meter in a safe
and efficient manner and in accordance with the rules of the Pima County Health
Department, the town and any other jurisdiction with regulatory powers over such
connections;
2. Safeguarding all town water utility property installed in or on the customer's premises for
the purpose of supplying water to that customer;
3. Exercising all reasonable care to prevent loss or damage to town water utility property,
excluding ordinary wear and tear. The customer shall be responsible for loss of or damage
to town water utility property on the customer's premises arising from neglect, carelessness
or misuse and shall reimburse the town for the cost of necessary repairs or replacements;
4. Payment of any equipment damage resulting from unauthorized breaking of seals,
tampering or bypassing the town water utility meter;
5. Notifying the town of any failure identified in town water utility equipment;
6. Paying all water rates, charges and fees when due.
Marana Town Code E 0 6 3~ 2~ 5 p 14 ~ 1 ~ev. v9s
, ~
B. Water fumished by the town shali be used oniy on the customers premises and shali not be
resold to any other person. During critical water conditions, as determined by the councii, me
customer shall use water only for thase purposes specified by the councii. Disregard for mis
provision shall be sufficient cause for refusal or discontinuance of water utility seNice by the
town.
C. Each customer shall provide me town and its employees and agents the right of safe ingress
and egress to the customer's premises for any purpose reasonably connected with the town's
water utility property used in furnishing service and the exercise of any and all rights secured
to it by law or this chapter.
Section 14-6-2 Payment of 8ills
Water rates, charges or fees are due and payable at the town hall upon biiling. Any water rates,
charges or fees not paid in fui{ by the fifteenth of tfie month, or within twelve days of billing,
whichever is later, shall result in a late charge of $5.a0 in addition to the balance due.
Section 14-6-3 Grounds for Termination of Service
A. Water service to a customer may be terminated by the town upon ten days advance written
notice, for any of the following reasons:
1. Customer violation of any of the provisions of this chapter;
2. Failure of the customer to meet or maintain the town water u6lity's credit and deposit
requirements;
3. Failure of the customer to provide the town reasonable access to its water utility equipment
and property;
4. Failure of a customer to pay a delinquent bill for uti(ity service.
Section 14-fi-4 Non-Payment of Delinquent Bill
If any bill for a water rate, charge or fee made to t}~e customer pursuant to this chapter is not paid
by the fifteenth of the month, the customer shall be given written notice specifying that the bill is
past due. The customer shall be given written notice specifying that the bill is delinquent and
outlining the procedure by which the customer may challenge the accuracy of the bill. If a
delinquent bi11 is not paid and no challenge has been made to the accuracy of the bill within ten
days of the notice of delinquency, the water supply will, without further notice, be turned off, and
not turned on until all sums due are paid in full, together with a charge for reconnection after
delinquency as provided in article 14-7.
Section 14-6-~ Reconnection of Service
In no case shall any individual or plumber turn on the water supply to any building or any supply
pipe, where the supply has been turned off for the nonpayment of the monthly water bill or for the
violation of any provision of this chapter. All water that has been turned off by the town water utility
shall only be turned on again by the employees or agents of the town water utility.
Marana Town Code ~~~j 5, 14-12 rev. vss
_
Section 14-6-6 Chalienge of Accuracy of Water Bill
A. The procedure by which a customer may chailenge the accuracy of a water bili and the
determination of ine validity of such challenge shall be as foliaws:
1. The customer shali notify the town, in writing, of the challenge of the accuracy of tfie water
biil and the reasons therefor. In the event the customer has received a notice of
delinquency, such challenge shall be filed within ten days of the date of the notice of
definquency.
2. The customer may request that the meter be re-read or the meter be tested, provided the
customer pays the meter re-read charge or the meter test charge in advance, in the
amount as provideti for in articie 14-7. A request for meter re-read or meter retest, paid
for by the customer, shall constitute a chal(enge to the accuracy of the water bill.
3. In the event the meter reading is found to be in error due to a meter r~-read or me#er test,
the town shall refund the cost of the meter re-read or meter test paid by the customer and
rebill the customer. Customer shall have twenty days to pay the delinquent bill which had
been challenged and a rebill sent.
4. The director of the town water utility may appoint a hearing officer to investigate all
challenges of the accuracy of water bills, when such challenge does not include a request
for a meter re-read or meter retest. The hearing o~cer shall meet with the customer
challenging the accuracy of the water bill. The hearing officer shal! be empowered to make
a decision as to the validity of the customer's challenge and, if he finds the customer's
chalfenge to be valid, shall be empowered to make the appropriate correction to the bill.
If it is necessary for determination of the merits of the customer's complaint for the hearing
officer to have a more complete set of facts before him at the time of ineeting with the
customer, he or she shall make whatever investigation is necessary before rendering a
decision.
5. The customers water service shall not be terminated untif and unless the hearing officer
comp(etes his or her investigation and finds the customer's challenge to be without merit,
or until t~e requested meter re-read or meter retest has been conducted and the meter has
been found to be working praperfy.
6. If the hearing officer rules that the bill rendered to the customer is accurate, such finding
is finai.
Section 14-fi-7 Deposit Requirement After Termination
The town shall require as a condition of reestablishing water service in the event of termination
due to non-payment of a delinquent water bill, payment in full of all amounts due and owing and
payment of a water utility deposit.
Section 14-6-8 Termination Without Notice
A. Water utility service to a customer may be terminated by the town; without advance written
notice, under the following conditions:
~ v~~~ 14-13
Marana Town Code rev. 2/96
- ~
1. The existence of an obvious hazard to me safety or heaith of the customef or tfie get~eral
population;
2. The town has evidence of water meter tampering or fraud;
3. Unauthorized resale of water or use of water utitity services;
4. Failure of a customer to comply with the curtailment pracedures imposed by the council
during supply shortages.
Section 14-fi-9 Service Obligations of Town
A. Level of Service. The town shall make reasonable efforts to supply a satisfactory and
continuous leve! of service to its customers.
B. Non-liabilit~. The town shall not be responsible forrany damage or claim of damage attributable
to any interruption or discontinuation of service resulting from:
1. Any cause against which the town could not have reasonabfy foreseen or made provision
for, such as but not limited to; i.e., force majeure;
2. Intentional service interruptions to make repairs or perform rautine maintenance;
3. Any service interruption caused by faciiities purchased by the town from existing private
water companies;
4. Curtailment.
C. Service Interru~tions. The town shall make reasonable efforts to reestablish service within the
shortest possible time when service interruptions occur. In the event of national emergency
or local disaster resulting in disruption of normal service, the town may, in the public interest,
interrupt service ta provide necessary service to civil defense, fire protection or other
emergency service agencies on a temporary basis until normal service to these agencies can
be restore~. When the town plans to interrupt service for more tt~an four hours to perform
necessary repairs or maintenance, the town shall attempt to inform affected customers at least
twenty-four hours in advance of the scheduled day and the estimated duration of the service
interruption. Such repairs shall be completed in the shortest possible time to minimize
inconvenience to customers of the town water utility. Notice to customers shall not be required
in the event of an emergency or an outage due to unanticipated events or causes.
D. Minimum Delivery Pressure. The town shall maintain a minimum standard delivery pressure
of 20 pounds per square inch gauge (PSIG) at the customer's meter or point of delivery.
E. Construction Standards. The town shall construct all facilities in accordance with t~e
guidelines established by the Arizona Department of Health Services, the Arizona Department
of Environmental Quality, the town and any other jurisdiction with authority over the
construction standards for public water supplies.
Section 14-5-10 Meter Reading; Measurement of Service
Marana Town Code 6 t} ~ ~~,,5 3 14-14 rev. 2ls6
~
A. Each custome~'s meter shatl be read monthly on as close to the same day as practical. All
water delivered by the town water utility shaii be billed on the basis of inetered volume safes,
except that the town may, at its option, provide a fixed charge schedule for the foliowing:
1. Temporary services where water use can be readily estimated;
2. Pubiic and private fire protection service;
3. Water used for town purposes.
Section 14-6-11 Customer Requested Meter Re-Reads
At the request of a customer, the town shali r~read the custamers meter within ten working days
after such request by the customer. Any re-reads shall be charged to the customer at the rate
provided for in article 14-7, provided that the original reading was not in error.
r
Section 14-6-12 Customer Requested Meter Tests
At the request of a customer, the town shali test the ~customer's meter. Meter tests shaii be
conducted within ten working days after such request by the customer. Meter tests shalf be
charged to the customer at the rate provided for in articte 14-7, provided that the meter was not
found to be in error by more than three percent.
Section 14-&-13 Bii(ing and Collection
A. Meter Readinq. The town shall biil its customers monthly for water services rendered. Meter
readings shali be scheduled for periods of not less than twenty-five days nor more than thirty-
five days. If tt~e town is unable to read the meter on the scheduled meter read date, the town
will estimate the consumption for the billing period giving consideration to the following factors
where applicable:
1. The customer's usage during the same month of the previous year;
2. The amount of usage during the preceding month.
3. Failure on the part of the customer to comply with a reasonable request by the town for
access to its meter may lead to discontinuance of service.
B. Estimated Bills. Estimated bills will only be issued under the foflowing conditions:
1. Conditions which prevent the town from reading the meter; or
2. Circumstances that make it dangerous or impossible to read the meter; i.e., locked gates,
blocked meters, vicious or dangerous animals, threatening conduct of the customer, etc.
3. Each bill based on estimated usage will indicate that it is an estimated bill.
C. Combininq Meters. Each meter at a customer's premises will be considered separately for
bilfing purpases, and the readings of two or more meters will not be combined unless the town,
in its sole judgement, determines good cause exists to combine meter readings.
Marana Town Code f O~~~ ~ b 5 4 14-15 feV• ~
_ _ _
, . ~
D. Minimum Sill Information. Each bili for water utiii~y service wili contain the following minimum
information:
1. Date and meter reading at the start of a biliing period;
2. Previous month's meter reading;
3. Bil( usage;
4. Town water utility telephone number;
5. Customer's name;
6. Service account number;
7. Amount due and due date;
8. Past due amount plus interest (where appropriate);
9. Other charges and taxes (where appiicabie).
E. Bil(inQ Date. The date a bifl is rendered may be evidenced by any of the following: the
postmark date, the mailing date, certified maif or certificate of mailing.
Article 14-7 WATER RATES AND CHARGES
Section 14-7-1 Monthty Charges
A. Charges for water utility service shall be made at monthly intervals and shall, to the extent
consistent with the express poiicy to charge for water in direct proportion to the cost of
securing, developing and delivering water to the customers of the town water system, recover
all capital, operational and maintenance costs associated with or attributable to providing water
service through the town water system. Water charges will be computed through the
summation of a monthly water service fee plus a monthly water use charge, plus any
applicable state or local sales taxes.
B. The monthly water service fee (including the first 1,000 gallons of water) shall be base~ upon
the meter size, and shall be as follows:
Meter size Minimum CharQe
Sr~ x~<" meter: $ 14.00 per montii
x 3/<" meter: $ 14.00 per month
1' meter: $ 34.00 per month
1'fz" meter: $ 37.00 per month
2" meter $ 43.00 per manth
3" meter $ 58.00 per month
4' meter $102.00 per month
5' meter $152.00 per month
6" meter . $202.Ofl per month
Marana Town Code 8 ~~j S~ 14-16 rev. y9s
~ ~
C. The monthly water use fee shall be:
1. For each 1,000 gaffons above the minimum service fee, $2.55 per 1,OOo gailons.
Section 147-2 Instailation Charges ~
A. There shall be an installation charge for all water service connections. This charge shali
include the cost of the water meter, valves, boxes and instalia6on.
B. Deposi~ and charges for the installation of a metered water service connection shall be based
upon the size of the meter instalied, and shall be as foilows:
Guarantee Installation Connection
Meter Size Deoosit CharQe CharQe Totai
~/4 X br~' $ 50.00 $ 500.00 $ 10a.00 $ 650.00
3/a x 3/a' $ 5Q.00 $ 500.00 $~-100.00 $ 650.00
1• $ 60.00 $ 850.00 $ 250.00 160.00
1~,~ $ 70.0a $1300.Oa $ 600.00 $1970.Oa
2• $110.00 $1700.00 $1000.00 $ 2810.00
3' and up $ $ $ $
C. The installation charge for a metered water service connection in excess of two (2) inches in
diameter shail be the town's actuai cost, inciuding labor, materials and administrative costs,
for installing such mete~.
D. ln addifion to any service line installation charge, all applicabfe permit fe~s, right-of-way costs
or unusual construction costs shall be added and paid for by me applicant at the time of his
application.
E. lnstaflation charges assume availability of an existing water main contiguous to the applicant's
property. In the event a main extension is required, applicant shall pay all costs for such main
extension, which costs shall be non-refundable.
F. Guarantee deposits are refunded when customer moves or requests a discontinuance of
service, provided all water bills are paid in full.
G. Connection fees are designed to reflect approximate and appropriate costs of replacing t~e
demand on existing water supply sources created by each new service. Al! connection fees
are to be retained in a separate and special fund and account to be used for water source
development to upgrade and improve existing systems. Funds could be used to pay for
appropriate portions of any new source deve~opment that was partially paid for by a developer
to serve a new area and which has excess capacity that could be interconnected and benefit
existing customers. Funds could also be used to develop facilities to take and treat CAP water
if that were to become a viable alternative for existing sources in the future.
H. Set charges for installations reflect estimated expenses and are the required up-front charges.
These are estimated charges for the simplest type of installation. The actual cost of installation
wi11 be billed as determined by the Marana Municipal Water System. The actual cost will be
increased in the case of pavement cutting, excessive length, rocky ground, or any other
additional cost inflating factors, or if the actual costs are less tf~an the installation charge t~e
Marana Town Code ~ U U~ U ~ 6 5 6 14-17 rev. 2196
excess wiil be refunded. Since the installation of large meters involves such variable
situations, these wili be evaluated individualiy and estimate made in each case. The same
policy of actual cost to Marana Municipal Water System wauid apply. Large meters
instal~ations can be made by the customers contractor provided the contractor fumishes proaf
of licensing. AI( final inspections and approvafs shall be made by Marana Municipal Water
System personnei.
Section 14-7-3 Other Service Charges
A. New Service Establishment Fee: $19.00. The new service establishment fee is for the cost
of estabiishing the new customer service account during regular working days (Monday
through Friday) between the hours of 9:00 a.m. and 4:00 p.m., holidays excepted.
B. New Service Establishment Fee After Hours: $45.00.
C. Reconnect Fee (Delinauent Accountl~ $19 00 (~1us brinq acount currenl. The reconnect fee
shall be for the cost of reestablishing water service after water service has been tefminated for
any other reason. .
D. Customer Reauested Re-read of Meter: $35.00. This fee shall be refundable in the event the
meter is found to not be reading accurately, defined as an error of greater than 3%.
E. Check Returned for Insufficient Funds: $12.00. This fes shal( be added to a customer's water
bill in the event the check for payment is returned unpaid due to insufficient funds or c}osed
account or stop payment.
F. Customer Reauested Meter Test: $40.00. This fe~ shall be refundable to the customer in the
event the meter is found not to be readmg accurately, defined as an error of greater than 3%.
G. Late Pavment Fe~: $ 5.00.
Article 14-8 EMEAGENCY WATER CONSERVATION RESPONSE
Section 14-8-1 Deciaration of Policy
It is hereby declared that, because of varying conditions related to water resource suppfy and
distribution system capabiiities within the Town of Marana, it is necessary to establish and enforce
methods and procedures to ensure that, in time of emergency shortage of the local water supply,
the water resources available to the residents of the town are put to the maximum beneficial use,
that the unreasonable use, or unreasonable method of use is prevented, and that conservation of
water is accomplished in the interests of the customers of the town water utility, customers of other
water utilities located within the town and for the public health, safety, and welfare of the residents
of the town.
Section 14-8-2 Definitions
A. In this article, unless the context otherwise requires:
1. "Economic hardship" means a threat to an individual's or business' primary source of
income.
Marana Town Code
I 0 6 3 8 2 5 S 7, 4-, 8 feV. v96
r
2. "Notification to me pubiic' means notification through loca! media, inciuding interviews, and
issuance of news releases.
3. °Outdoor watering day" means a specific day, as described in a specific outdaor watering
plan, during which iRigation with sp~inkler systems or otherwise may take place.
Section 148-3 Apptication
A. This article applies to all municipa! and industrial water utility customers who own, occupy, or
control water used on any premises as defined in this artic(e. This article shall not apply to any
agricultural use of water furnished by an irrigation district
B. No person shall make, cause, use, or permit the use of water received from the Town of
Marana water utility or any other municipally owned or privately owned water utility providing
wrater service within the town for residential, commercial, industrial, governmental or any other
purpose in any manner contrary to any provisior~ in this article.
C. Mandatory emergency conservation measures shall be implemented based upon t~e
declaration of an emergency pursuant to secfion 14-8-4.
Section 14-8-4 Declaration of Water Emergency Autfiorized
The council, or in the absence of a quorum the mayor or the vic~mayor, upon tfie recommendation
of the town manager is hereby authorized to declare a water emergency and to implement
mandatory conservation measures as set forth in this article.
Section 14-&5 lmplementation; Termination
A. The town manager shall develop guidelines which set forth general criteria to assist the council,
or in the absence of a quorum the mayor or the vice-mayor, in determining when to declare a
water emergency. Upon declaration of a water emergency, the town manager shall report in
writing to the council providing the reasons for and expected duration of such emergency and
describing implementation of emergency water conservation measures.
B. A water emergency may be declared for a specific water utility system, such as, but not limited
to, the Town of Marana water utility system, the City of Tucson water utility system located
within the tovm, or any other pubfic or private water utility system located within the town, which
is unable to provide adequate quantifies, qualities or pressure of water delivery in comp(iance
with Arizona Department of Environmental Quality standards or regulations, or fire flow
requirements, and which constitutes a danger to the public health, safety and welfare of the
residents of that water uti(ity system.
C. The declaration of a water emergency shall be specific to the water utility system which is
unable to provide adequate quantities, qualities or pressure of water delivery in compliance
with Arizona Department of Environmental Quality standards or regulations, or fire flow
requirements, and to the water customers of that water utility system.
D. The owner or operator of a water uti1~ water emer entc dpur ulantl
o th s article oaf its water
request, in writing, t~at the town decfare a 9 Y
utility system, setting forth the reasons and justification therefore.
E1 3~ ~G 8 14-19 rev. 2~s
Marana Town Coda
_ ~ C
E. Upon the cessation of the condition or conditions giving rise ta the water emergency, or upon
majority vote of the council, or in tfie absence of a quorum the mayor or the vic~mayor shall
declare the water emergency terminated. Upon such termination, the mandatory conservation
measures shaii no longer be in effect
~ Section 148-6 Mandatory Emergency Water Conservation Measures
A. Upon deciaration of a watef emergency and notif,cation to the pubfic, the foilowing mandatory
restrictions upon non-essential users shall be enforced as to the customers of the water utiiity
system for which the water emergency was declared:
1. All outdoor iRigation, except for those areas irrigated with reclaimed water or water
provided by an irrigation district for agriculturai use, is prohibited. If the town manager
deems it appropriate, a schedule designa6ng certain outdoor watering days may be
implemented in place of the irrigation ban.
P
2. Washing of sidewalks, driveways, parking areas, tennis courts, patios, or other paved
areas with water fram any pressurized source, including garden hoses, except to alleviate
immediate heaith or safety hazards, is prohibited.
3. The outdoor use of any water-based play apparatus connected to a pressurized source is
prohibited.
4. Operation of water cooled space and equipment cooling systems below an operating
efficiency level of two cycles of concentration is prohibited.
5. Restaurants and other food service establishments are prohibited ftom serving water to
their customers unless water is specificaUy requested by the customer.
6. The operatio~ of outdoor misting systems used to cool public areas is prohibited.
7. The filling of swimming pools, fountains, spas, or other related exterior water features is
prohibited.
8. The washing of automobiles, trucks trailers and other types of mobile equipment is
prohibited, except at facilifies equipped with wash water recirculation systems, and for
vehicles requiring frequent washing to protect public health, safety and welfare.
Section 14-8-7 Varianc2
The town manager, or the town manager's designee, is authorized to review hardship cases and
special cases within which strict application of tt~is article would result in serious hardship to a
customer. A variance may be granted only for the reasons involving health, safety, or economic
hardship. Application for a variance from requirements of this articte must be made on a form
provided by the town manager.
Section 14-8-8 Vio(ation
A. In the event of any violation of this article the water utility for which tt~e emergency was
declared shall be responsible for having a written notice placed on the property where the
violation accurred and a duplicate mailed to the person who is regularly billed for the service
Marana Town Code 6~ S C~ 14-20 rev. v9s
_
~ F.
where me violation occurred and to any person ~own to the tovm or the water utility, wtio is
responsibie for the violation, and order that it be coRected, ceased, o~ abated immediatety or
within such specified time as t~e town or water utility determines is reasonable under me
circumstances and shall contain a description of the fees and penalties associated with said
violation.
B. If said order is not compfied with, within twenty-four (24) hours, the town or the water utility may
forthwith disconnect the service where me violation occurred. A fee of two hundred fifty dollars
($250.00) shall be imposed for the reconnection of any service disconnected pursuant to non-
compliance, which shall be in addition to other fees or charges imposed by this article fo~
disconnection of service.
C. In addition to be+ng grounds for disconnection of service, viofatio~ of any provision of this article
shall be a civil infraction. An individual or corporaUon convicted of violating provisions of this
article shall be assessed a civil penalty of not less than two hundred fifty dollars ($250.00).
D. Nothing herein shall conflict with the rules and regulation and approved tariffs of the Arizona
Corporation Commission as they may appiy to public service corporations furnishing water
service within the Town of Marana. -
Section 14-&9 Enforcement
The town manager is authorized to designate town employees or employees of water utility
systems not owned by the town to enforce tf~e provisions of this article. The City of Tucson and
employees of the City of Tucson's water uti(ity are expressly authorized to enforce the provisions
of this article solely as to customers of the City of Tucson's water utiiity system located withi~ the
town.
Ar~icle 14-9 VIOLATIONS
Section 14-9-1 InstaUation and Repair by Individuats Prohibited
All water services to be installed by the town water utiiity shalt only be installed by the town or its
authorized empioyees or agents as provided for in this chapter. It is unlawfui for any person to
install any such service or any part of such service, or to repair any service now existing or any part
thereof, from the water mains to and including the meter, or disturb any right-of-way easement,
street or alley in any manner for the purpose of locating problems with tfie water system or for any
other reason whatsoever.
Section 14-9-2 Turning on Water wthout Authority
It is unlawful for any person, by false key or otherwise, after the water has been shut off from any
premises, to cause such premises to be supplied with water or for any person to aid or abet such
action.
Section 14-~3 Escaping Water
No person shall allow water to escape from his or her premises upon public property, such as
alleys, roads or streets, nor upon any other person's property.
~ O~~~ Z~ c n 14-21 rev. 21se
Marana Town Code U U
;
Section 14g-4 Interference, Tampering ~t1'~ Facilities
No person shali open or close any fire hydrant or stopcoclc connected wim the water system of the
town, or lift or remove tfie covers of any gate vatves or shutoffs, or ta~ into town water mains or
otherwise remove water from the town water utiiity system without a permit from tfie director of the
town v~ratef utility, or in violation of conditions of a permit, except in case of fire, and tt~en under the
direction of the officers of the fire department
Section 149-5 Damaging, Defacing Faciiities
It is unlawful for any person to destroy, deface, impair, injure or wantoniy force open any gate or
door, or in any way whatsoever destroy, injure or deface any reservoir, buiiding, storage tank or
appurtenances, fences, trees or fixtures or property appertaining to the water utility of the town.
Articfe 14-10 AMENDMENTS AND PUBL.IC HEARING
4
Section 14-10-1 Amendment Procedure
This chapter may be amended, but all of the proposed-amendments shall be submitted first to the
Water Utility Advisory Committee for its recommendation, which recommendation shall be
submitted to the council within thirty days after any proposed amendment has been considered by
the Water Utility Advisory Committee in a pubiic meeting.
Section 14-1 ~2 Pubiic Hearing Requirement
Before any proposed amendment to this cha.~ter may be considered by the council, the council
shail hofd a public hearing on the proposed amendment. Notice of the time and ptace of the
hearing shali be given at least fifteehe ay~s b~~obe p ovided g the wate~ bi~iis of the'towntsrwater
shali aiso require not~ce of the 9
customers sent to the customers at least fifteen days prior to the hearing.
[ t 14-22 rev. 2/96
Marana Town Code E} L3 U(
EXHIBIT 4.2.3
ADJUSTMENTS TO WATER PRODUCTION RATES
A. METHOD FOR ADJUSTING RATES.
District's Authorized Representative may alter the water production rate as permitted
pursuant to Sections 4.2.3, 4.2.4, 6.5 and/or 8.5 of the Agreement by providing not less than
forty-five days written notice to Town's Authorized Representative. Said notice shall include
the proposed rate adjustment, the supporting calculation therefore and the date the new water
production charge will go into effect.
B. ANNUAL ADJUSTMENTS.
The rates established in Paragraph 4.2 of the Agreement shall be adjusted
annually for increa.ses or decreases in costs according to the following formula:
AR = ((PR - PPC) * HWI) + (PPC * PCI)
Where:
AR = Adjusted Rates
HWI = Handy Whitman Index for Plateau Region, Water
Production and Pumping stated as a percentage
PCI = Power Costs Index stated as a percentage
PPC = Previous Year's Average Power Cost/AF for all Trust
Wells Town pays District for production
PR = Previous Year's Total Rate/AF
1. All Costs Except Power Costs
For purposes of this E~ibit, non-power costs shall be adjusted based upon the
Handy-Whitman Index (HWI) for the Plateau Region to the above base percentage. The end
of the calendar year HWI percentages shall be used. The base year shall be 1996. The base
HWI factor for 1996 is 450 and will also become a base of 1. The actual average power
costs per acre foot for the previous calendar year shall be deducted from the total per acre
foot price for the previous calendar year. The result shall multiplied by the percentage
change in the HWI during the previous calendar year.
~~6~~
2. Power Costs
Average power costs per acre feet includes all amounts billed by providing
utilities during the previous calendar year divided by the number of acre feet pumped with
electricity during the same period. The average per acre foot power cost shall be initially
determined in 1996. In subsequent years the change in the average power costs per acre foot
sha11 be added to, or subtracted from, if a decrease in costs occurred, the base power costs.
The sum is then added to the non-power costs which have been adjusted by the HWI. This
adjustment should automatically take into consideration any reduced power cost, including
that achieved due to wholesale power obtained by Town.
C. ADJUSTING FOR WATER DELIVERED OUTSIDE DISTRI T.
Town shall provide the Operating Committee the monthly meter readings to District of
all customers served water from Trust Wells, but located outside of the District. The total of
the monthly readings, plus losses of five percent (S but less the amount of water, if any,
from Town owned water supplies located outside the District provided to serve customers
within the District, shall constitute the amount of water subject to the outside District rate set
forth in Section 4.2.2.
D. ADJUSTING FOR TOWN TAXE , ASSESSMENTS AND FEE .
In any year the Town imposes a tax, assessment or fee against agricultural lands in the
District or upon District's membership and the revenue raised therefrom may be expended
toward the costs of providing domestic water, Town shall calculate the difference between the
revenues generated and the costs incutred by its water division, as those terms are defined in
Section 6. S. Whenever, costs exceed revenues, the difference, but not exceeding the total
revenues collected from District lands or membership, shall be divided by the number of acre
feet produced for Town during the previous year. The resulting cost per foot shall be added
to Production Rate until the total difference is paid by Town.
1063~ ~5~3
_ _
EXHIBIT 5.1.5
FACILITIE5, EQUIPMENT AND OPERATIONAL RESPONSIBILITY
AT JOINT USE WELL-SITES
To the extent this Exhibit 5.1.5 is not prepared at
Closing, the Operating Committee is directed, within 60 days of
Closing, to prepare Exhibit 5.1.5 to define the facilities,
equipment and property at each joint use well-site, including the
division of ownership and operational responsibility.
~ Q~.~U
~XHIBIT 5.3
DEPRECIATION/AMORTIZATION FACTOR
To the extent this Exhibit 5.3 is not prepared at
Closing, the Operating Committee is directed, within 60 days of
Closing, to prepare Exhibit 5.3 to set forth the depreciation or
amortization factor to be utilized in determining the credit to
be provided Town against the acquisition price of the well and
well-site in the event the a Trust well reverts to District in
accordance with Section 2.2.5, in the event Town later acquires
the well from District.
I :~~~i5
EXHIBIT 5.4
METHOD OF VALUING AGRICULTURAL WELLS
SUBSEQUENTLY ACQUIRED BY TOWN
To the extent this Exhibit 5.4 is not prepared at
Closing, the Operating Committee is directed, within 60 days of
Closing, to prepare Exhibit 5.4 to describe the valuation method
to be utilized in valuing District agricultural wells that
District has declared to be surplus and the Town desires to
purchase. This Exhibit shall not preclude the parties from
mutually agreeing to another valuation methodology, nor require
District to sell or otherwise relinquish any agricultural well
not deemed by District, in its sole discretion, to be surplus.
~ ~~~J~
~
EXHIBIT 6.1
ACCOUNTING AND BILLING
To the extent this Exhibit 6.1 is not prepared at
Closing, the Operating Committee is directed, within 60 days of
Closing, to prepare Exhibit 6.1 to set forth the general
accounting and billing practices to be followed by the parties as
required by Sections 6.1, 6.1.1, 6.2„ 6.4, 6.4.1 and including,
but not necessarily limited to, the following:
a) Method for invoicing Town for electrical
usage;
b) Method for estimating electrical energy use
when meter not operational;
c) Method for adjusting for difference between
utility billings and meter readings;
d) Method for testing electric metering
equipment and assigning costs therefore;
e) Method for estimating water production when
water meter not operational; and
f) Billing schedule, due dates, method for
resolving billing disputes, interest rate,
and remedies for delinquent bills.
i ~~~~7
______.u__.__~______.
-
02/18/98 R'ED 1~:2i FAY FIDELITY NaT TITLC .001
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F. ANN RGURIOUE2, RECO!lDER ~ DOCKETi 1Oi37 ~
RECORDED 13Yi RAA ~ PAOQ~ 1932
DEPUTY REC~DER N0. OF PAOBSt i
2484 ROOE 8E(iUENCE~ 97136132
TFATI 09/24/97
WILLIAr7 P SULI.IVAN QCDEED 16t3BR00
2712 N SEVEN7H ST . MAIL
FHO£NIl( AZ 8~006 AMOLINT PAID ~ f0.00
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QUIT CLAIM DEED
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Effectivc Aate Counry and Strte Wherc Reaf Propsny is Locsted;
Pirna Caunty, ]~,riaona
Gran~or~ (Name, Mailing Address and Zip Code) Granvx: (Name, M~iiing Address aad Zip Code)
Cortaro-Mat~~na Irrfgatian District Town of Marana
12253 We~t ~rier Road 13251 North Lon Adams 5treet
Marana, Arir.ona 85653 Merane, ~,rizona 85653
Subject Rsal Prcpetty: (Addtes~ or Location} L~f ~riy~io 1 Z ~
Perxn~ Whase
Initid~
Appeu !o
the Riaht
Subject Rea! Prc~peny: {Legal Description)~
The ta~~c•.:,~~q described real property containing dtlcmaatic waber
relatQd f~c:.Iitien aituate in Pima County, Arizona:
The So?ith 20 feeL of the Norta 270 teet of th~ Southeast
quartea~ of the Southenat quarter ot Section 18, T115 of R11E,
Gb3RBarf Pim~ Co t, l4Xi pnn
For Valuable Coi isideranon, ~mm~or qwt e~s~m7 fo Granta d! ogbts, title and ir~Eerest ia Subject Red
Property wgetha ~ with tli rishts ond privilega ~ppwlenant or to baame apyurtea~nt the~ta on th~
eff e deta
f~CES~DEUT - ~o'iP~D1,~
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ignetures of Grentor
STATEOEARIL~A .taro.wPn.w•ah:+w?~w. •t1w~n~.rr+r~b.tv~rr ,ot ~
COUt~l~Y UF f'~j ~ ~
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10637 1932
NOTICE OF ELECTION TO OPERATE AND MAINTAIN
THE PICTURE ROCK WELL
WHEREAS, under Paragraph 2.2.2 of the Intergovernmental Agreement
between the Town of Marana (The "Town") and the Cortaro-Marana Irrigation District
and the Cortaro Water Users' Association (collectively the "District") dated the 16th day
of September, 1997 (the "Agreement"), the Town may elect to operate and maintain the
Picture Rock Well (the "Well") for use only at the Picture Rock Subdivision, after the Well
is placed in trust under the Cortaro-Marana Trust Agreement dated the 16th day of
September, 1997 (the "Trust").
NOW THEREFORE, the Town hereby elects to operate and maintain the
Well and releases the District from any obGgation whatsoever regarding the operation and
maintenance of the Well during the term of this Election.
In accordance with Paragraph 2.2.2 of the Agreement, the Town is relieved
" from any obligation to pay production costs to the District pursuant to Part IV of the
Agreement, but only to the extent the water produced from the Well is used at the Picture
Rock Subdivision and services no more than 155 residential lots thereat.
This election shall be irrevocable so long as the Well is held by the Cortaro-
Marana Irrigation District, or its successor trustees under the Trust or unless otherwise
mutually agreed to in writing between the parties.
DATED this day of October, 1997.
TOWN OF MARANA
By
As Authorized Representative nder
the Intergovernmental Agreement
~
:
1~tiARANA RESOLUTION NO. 97-54
A RES OLUTION OF TI~ TOWN COUNCII, OF T~ TOWN OF bZARpNA, pRIZONA,
AUTHORIZING AND APPROVING ESCROW INSTRUCTIONS FOR T'HE PURCgpSE OF
T'I-~ CORTARa1~ZA,RANA IRRIGATION DISTRICT MUIVICIPAL WAT'ER SYSTEM; AND
DECLARiNG AN EMERGENCY.
Vi~I~REAS, The Town ofMarana and the CortaraMarana Irrigation District ("CMID") and
the Cortaro Water Users Association ("CWUA") have previously adopted a Memorandum of
Understanding regarding the Town's purchase of the C1~IID CW[TA municipal water system; and
WHEREAS, the parties desire to open up an escmw account into which the Town will
deposit the funds for the purchase price, in an amount of $600,000; and
VvHF.I2F.AS, closing of the purchase of the Clv~ CWUA municipal water system requires
an additional, separate Intergovernmental Agreement between the parties.
NOW, 'THEREFORE, BE TT RESOLVED by the Mayor and Council of the Town of
Marana, Arizona, as follows:
Section 1. That the Mayor and Council hereby authorize the Mayor to execute the Escrow
Instructions attached hereto and made a part hereof as Exhibit "A"
Section 2. The Finance Director of the Town is hereby directed to deposit the amount of
$600,000 irno the escrow account to be established at First American Title Insurance
Company in furtherance of the Escrow Instructions.
Section 3. The Mayor and Town of Marana staff are further directed to take all necessary and
reasonable steps in furtherance of said Escrow Instructions.
Section 4. An emergency is hereby declared to exist affecting the health, safety, and welfare of
the people of Marana, and this Resolution shall be exempt from the provision of
Referendum as provided by law.
Marana, Arizona Resolution No. 97-54 Page 1 of 2
x , ~
PASSED AND ADOPT~D by the Mayor and Council of the Town of Marana, Arizona,
this 17th day of June, 1997.
~ ! -r ~ / i' / y~.~.~~~
Mayor ORA HA'RN " '
; ~
..4'~'I~ST: f, ~
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Town
C1eF~
APP O.VE S O FORM:
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Marana, Arizona Resolution No. 97-54 Paae 2 of 2
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7/11 aoadip/94 ae~ati~tlao
Q
INTERC~VE NMENTAL AGREEMENT_
BETWEEN
THE TOWN OF MAREI~I~
AN~
THE CORTARO- ARANA IRRIGATION DISTRICT AND
THE CORTARO WATER USERS' ASSOCIATION.
PIMA COUNTY. ARIZONA
locatioa in 6/7/93 draft of IGA
PARTIES :
The Town of Marana, Arizona ("Marana"), a municipal corporation of the State of
Arizona, and
The Cortaro-Marana Irrigation District, Pima County, Arizona, a political subdivision
and municipal corporation of the State of Arizona ("District") and the Cortaro Water Users'
Association, a non-profit corporation ("Associadon"), Disttict and Association collectively
refened to herein as ("Cortaro").
PLACE:
Marana, Arizona
DATE:
This intergovemmental Agreement ("IGA") is dated , 1994,
and shall become effective when fully executed and radfied as provided herein and recorded
with the office of the Pima County Recorder.
STATEMFNT OF PURPOSE:
The purpose of the Agreement is;
D~t 9/9/94
a. To create, set forth, define and otherwise provide for the intended
relationships between the Parties;
b. To describe the rights and duties of the Parties, each to the other;
c. To describe respective Service Areas of the Parties; and
d. To facilitate among the Parties the orderly transition of supply and
delivery of water to lands within the Cortaro Service Area as the uses
of those lands transition over time from predominately agricultural to
Municipal and Industrial Water Service ("MBcI Water Service")
requirements.
~~[~Ai JURSDICTION:
Nothing in this Agreement shall be considered as either limiting or eztending the legal
jurisdiction of either Marana or Cortaro.
RECITALS:
The following recitals represent general principles agreed upon by the Parties. 'These
principles are the basis for, and are incdrporated into, the specific contractual covenants
which follow.
1. The District and Association ("Cortaro") were formed for the primary
purpose of managing the acquisition and delivery of water and to provide water first for
irrigation and, secondarily, for municipal and other purposes to lands within its boundaries.
Cortaro and its predecessors have acted to further these purposes since at least 1919.
2. Cortaro has rights to water resources and currendy provides both
Agricultural Water Service and M&I Water Service to lands in the Cortaro Service Area.
Cortaro desires to appoint Marana as its agent for the purpose of providing M&I Water
Service to Cortaro lands as set forth in this IGA.
3. Marana is authorized to own and operate an M&I Water Utility and
provide M&I Water Service. Marana desires to obtain ownership of Cortaro's M&I water
distribution system, access to designated Cortaro wells for purchase of M&I water on a
wholesale basis, and establish a long-term relationship with Cortaro whereby Cortaro is
retained to operate and manage Marana's M&I Water Utility and any other water related
functions Marana may own or become involved in the future (i.e.; wastewater treatment,
effluent, recharge) on behalf of Marana.
DnR 9!9/94
_ . _
; _.....,.a . . _ .
4. Through the mechanism of this IGA the Parties desire and intend to
avoid unnecessary duplicadon of M&I Water Udlity facilities in accord with the legisladve
policy embodied in Sections 9-515 and 9-516, Arizona Revised Statutes. The IGA is
therefore intended to consolidate ownership interests and define on-going water and water-
related operational and management functions and responsibilities among the Parties.
5. It is intended Marana provide retail M&I Water Service to all lands in
the Cortaro Service Area, acdng on behalf of itself and as Cortards agent in fulfillment of
long-standing obligations to Cortaro landowners and M& I water users. Cortaro will
condnue to provide Agricultural Water Service and Wholesale M&I Water Service within
and/or without the Cortaro Service Area. On the effective date of this Agreement, all lands
within the Cortaro Service Area will be included within the Marana Service Area for
purposes of receiving M&I Water Service. The Parties understand that their respective service
areas overlap, yet each entity has separate and distinct boundaries, purposes and
responsibilities.
6. The intent is through the mechanism of this IGA, to provide a vehicle
for the orderly transfer of ownership of Cortaro's M&I water distribution system to Marana.
A further intent is through an Operations and Management Agreement ("O~M Agreement"
provided for herein and to become by reference a part hereo~ to describe and provide for the
M&I Water Service operation and management funcdons and responsibilities of Cortaro as
Marana's operating agent. It is understood, unless otherwise agreed herein, that Cortaro shall
retain ownership of all wells and well sites including M& I wells within the Cortaro Service
Area, until or unless these properties are transferred to Marana as provided for in this IGA.
As appropriate, operation of certain of Cortaro wells will be dedicated to the use of the
Marana M&I Water Utility. All of Cortaro's M&I water distribution system and all of its
M&I well site facilities beyond the Point of Delivery, as described in Section 6.2 (Cortaro
M&I Facilities) are intended to be transfened to Marana.
7. It is intended Cortaro sell water at wholesale to Marana, or any
successor to Marana, pursuant to the terms of this IGA, in amounts that approximate no less
than the annual M&I Water Service demand within the Cortaro Service Area.
8. Cortaro brings resources to be included in this Agreement which are
first and foremost for the continued benefit of the Cortaro Service Area (Cortaro lands), not
other lands included within the broader Marana Service Area. Only upon the written consent
of both Marana and Cortaro will water resources originating with Cortaro or within the
Cortaro Service Area be committed to supply lands within the broader area constituting the
Marana M&I Water Utility and outside the Cortaro Service Area. (Note: preserve Cortaro
resources without interfering with efficient and flexible water distribution).
Dnit 9/9/94
-3-
9. It is a purpose of this Agreement and each party to allow Cortaro
through operation of the IGA an opportunity to preserve and maintain a sound fmancial basis
for its operations so irrigation of certain of the agricultural lands of Cortaro remain
economically viable under the water laws of Arizona and othervvise. Cortaro's ultimate
purpose is to maintain a competitive agricultural water rate during any transidon from
agricultural to urban land uses. It is the fulfillment and accomplishment of this purpose that
requires the mutual agreement of the parties to Cortaro's continued long-term relationship
with Marana as an operational and management parMer in water and water-relat~ed activities
such as wastewater. In addition to compensation received for management services
performed, Cortaro is to be compensated for resources, properties and other assets Cortaro
transfers to Marana, now and in the future, all as defined in this IGA.
10. It is intended, contingent upon the continued effectiveness and
operadon of the IGA, deed restrictions recorded at D?ocket , Page
, in the Office of the Pima County Recorder, Pima County, Arizona shall not
~ interfere with the performance by the Parties of ttus IGA.
PART 1- DEFINITIONS & ABBREVIATIONS (refer to listing)
P~1~T 2- MARANA TO PROVIDE M&I WATER SERVICE; DESIGNATION OF
AS~ENT~ RATES FOR SERVIGE. NON-DISCI~iMINATION
2.1. [2 ~.2. 8c 2.2.1. ) Marana Service Area: Upon the effective date of this IGA,
the Cortaro Service Area as described in Exhibit is incorporated into and made a part of
the Marana Service Area for the purpose of retail M&I Water Service, allowing for
~exceptions where service is currently provided by other recognized water providers.
2.2. [2.1.1.] Desi~nation of A~ent; Acc ce of Agency: Cortaro designates
Marana as its agent for the purpose of distributing those Cortaro water resources as set forth
in this IGA. Marana accepts this agency and agrees to provide M~I Water Service
throughout the Cortaro Service Area, pursuant to the provisions of this IGA.
2.3. [2.2.2. & 2.2.4.) RAtes for Town M&I Water Service~ Non-Discrimination:
Rates for Marana M&I Water Service as determined by Marana shall be based upon Cost of
Service Principles and, except as otherwise provided in this IGA, MBtI Water Service by
Marana shall be provided on Non-Discriminatory terms and conditions. Policies for water
charges and establishment of service to new customers or development in the Cortazo Service
Area shall be identical to those generally applicable throughout the Marana Service Area,
irrespective of location within or without Marana's town boundaries. The rates may differ
for different classes of customers and customer classification may be established on such
Doft 9/9/94
-4-
tradidonal Non-Discriminatory bases as residential, commercial, industrial and as otherwise
commonly provided in the industry and on such cost-related elements of rate-making as
elevation and distance from water resource. [New] Within the Marana Service Area some
lands or facilides may develop and transition from vacant or agricultural uses and provision
may be made for their water uses pursuant to special contracts for water resources and/or
services with a Replenishment or similar special district or with an agency of state or local
govemment. Additional customer classes in those instances may be required to be created
together with separate and distinct charges and costs to recognize those situations and thereby
result in water rates or service charges over and above the otherwise standard rates of service
in the Marana Service Area, including the Cortaro Service Area.
2.3.1 [2.2. 3. & 3.1 ] Service Outside the Cortaro Area: Consistent with Paragraph
2.3, nothing herein shall preclude Marana from contracting to provide M&I Water Service to
particular lands or parcels outside the Cortaro Service Area with Conditions of Service and
rates different from and in excess of those charged within the Cortaro Service Area.
~ P T 3- DISTRIBUTION OF WATER~ SEPARATION OF WATER RESOURCES
3.1. [2.1.8.] Distrib~tion of Marana Service Area Water Resources: Marana
agrees, water generally available or under its control or any water resource or control
thereof obtained by Marana in the future, including water credits or allocations of CAP
water, will be for the benefit of and provided equitably throughout the Marana Service Area,
including the Cortaro Service Area.
3.2. [2.1.4.] Distribution of Cortaro Service Area Water Resources;~y to Protect
- Water Ri~~ Within the Cortaro Service Area, the Operating Committee (establishment of
which is provided elsewhere herein) shall establish a budget describing and defiting the water
resources that originate for or within Cortaro and/or the Cortaro Service Area and the
Committee shall manage the pro-rata distribution of these water resources for the benefit of
each Cortaro Service Area landowner reasonably expected to require MBci Water Service
and/or a designation of Assured Water Supply (AWS) at some future point. The Operadng
Committee shall annually review and adjust as necessary the quantity of water resources
determinal to be available for this purpose and shall develop reasonable criteria to resist or
control inequitable or disproportionate applications for M&. I water service as urban
development occurs within the Cortaro Service Area.
3.3. [2.1.6.) Ch~antificati~n c~f Cortato Water Resources: The amount of water
actually available from Cortaro for the Cortaro Water Service Area from all sources, may be
adjusted from time to time upon determination and notificadon by The Arizona Department
of Water Resources (ADWR) or other agencies with legal jurisdiction and authority to do so.
DiaR 9/9/94
'S-
3.4. [Part 17] DuYy to Protect Water Ri~ Marana and Cortaro will take all
reasonable steps to preserve and protect Cortaro water rights and resources. Should Cortaro
and Marana agree certain Cortaro rights could be better protected by redesignating portions of
water uses from agriculture to other uses, the Authorized Representatives, when mutually so
directed and authorized by the Parties, will have the authority to make applications to
appropriate agencies or authorities to effect redesignation.
PART 4- CORTARO TO PROVIDE AGRICULTUR,AL &
WHOL,ES F NON-POT LE WATER SERVICE
4.1. [2.1.5.] Control of Agricult~ral Water Resources: Cortaro retains sole
management and control over Cortaro water resources as those pertain to Agricultural Water
Service until such time as Cortaro determines those resources and related facilities are
available to serve the M&I W~ter Service needs. (New] Nothing herein shall prevent Cortaro
from entering into agreements to provide service from its water resources or to operate
facilities which activities are in furtherance of Cortaro's govemmental duty and primary
goal of making agricultural irrigation more economically viable (e.g., Fletcher Challenge
proposal).
4.2. [8.2.) Non-Potable Water and Curtent Service: Cortaro will continue to
provide non-potable M&I Water Service through the use of irrigadon and multiple use welis
and distribution systems to several non-potable water customers, including golf courses in the
Cortaro Service Area. Cortaro reserves the right to service additional non-potable customers
in this manner.
- 4.3 (8.2.1.] I,~n_dsca.~ Water Service Limits: Cortaro agrees not to supply water
through its irrigation distribution system for residential landscape irrigation other than lawn
irrigation without the specific consent of Marana. Cortaro will make available to Marana
annual reports on such uses by Cortaro to ADWR.
PART 5- ASSURED WATER SUPPLY (AWSI; CAP WATER
5.1. [2.1.3.] Asstired Water SuRp1T("AWS") for Cortaro Service Area: Marana
agrees to exercise its best efforts to provide and maintain an AWS, as this term is defined in
Arizona law, for lands within the Marana Service Area. More particulazly, it shall be an
obligation of the Authorized Representatives to use their best efforts to preserve to the
maximum extent possible those quantities of water identified in the Cortaro AWS report
(hydrology report) on file with ADWR for application within the Cortaro Service Area.
Additionally, the Authorized Representatives shall use their best efforts and are authorized to
take all necessary steps to further maximize in quantity a determinadon of AWS for the
DiaR 9/9/94
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Cortaro Service Area, using any and all of the water resources of Cortaro which Cortaro
determines are available for retail M&I Water Service. Nothing in this IGA shall preclude
Marana or Cortaro from other separate agreements to enhance the AWS status of the Marana
and Cortaro Service Areas by replenishment, recharge, reuse or other water augmentation
projects or from entering into agreements for other purposes, such as certification of an
AWS for individual developments or for the permitting of industrial facilities or uses.
5.2. [2.1.7., 2.1.8. * 3.1.6.] i IMITATION ON USE OF CORTARO SERVIGE
~,RFA RFSOLIRCES OUTSIDE CORTARO SERVICE AREA: No Cortaro Service Area
water resources shall be purchased, delivered, supplied or caused to be supplied, nor
committed to sustain AWS designations outside of the Cortaro Service Area without first
receiving the written approval of ~ Marana and Cortaro. Any and each such request must
be separately quantified and approved. Cortaro shall have the right to place an upper limit on
deliveries of water developed from inside the Cortaro service Area to lands outside the
Cortaro Service Area. Once any such deliveries are properly approved, Cortaro intends to
remain committed to annually provide quantities of water previously approved for delivery,
unless Marana and Cortaro mutually agree otherwise.
5.3. [2.1.8. & Part 12] Trancfer o Cortaro CAP Water Contract: Subject to
approval of the Central Arizona Water Conservation District, Cortaro shall cooperate with
Marana to eff~t transfer to Marana of Cortaro's CAP Water Service Subcontract for M&I
water, dated . Any benefits to be derived from Marana's receipt
and use of this CAP allocation shall accrue first to lands within the Cortaro Service Area.
5.4 [8.1] Rechar~e Credits~AWS Credits: In the event Marana obtains CAP
. water or effluent of adequate quality for irrigation of crops currendy grown by landowners
served by Cortaro, Marana and Cortaro agree that Marana may provide such water resources
to Cortaro at a price to be mutually agreed upon but in recognidon that use by Cortaro acts to
enhance the eventual quality of the water upon recovery For M& I purposes. In addidon,
should the Parties agree, Cortaro agrees to execute any and all agreements necess~ry to
provide Marana with the resulting recharge or AWS credits but Marana agrees to share such
credits with Cortaro. In the event third parties seek to contract with Cortaro for recharge or
replenishment of CAP water or effluent in exchange for credits, Cortaro sha11 make its best
effort to provide Marana with the first right of refusal to purchase such credits. In the event
AWS credits or quantities of water are legally available to Marana as a consequence of
urbanization of irrigated lands within the Cortaro Service Area, all such water supply credits
or quantities of water shall become the right and property of Marana without further
consideration, consistent with provisions of Part 3 and paragraph 5.2.
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I
PART 6- TRAN5FER OF FACILITIES~ OWNERSHIP
6.1. [5.12.] TIME OF TRANSFER: Marana shall be deemed to have obtained
the control, benefit and use of the Cortaro M&I Facilities transferred herein on the Effective
Date of this Agreement.
6.2. [5.0., 5.1. & 4.6.1.] FACII ITLFS~ Y TEM~., INVENTORY TO BE
TRANSFERRED: Cortaro shall convey to Marana all right, title and interest in and to the
physical properties of four retail M&I water systems known as (1) Oshrin Park, (2) La Puerta
del Norte, (3) Marana and (4) Falstaff Flats Systems and collecdvely referred to as the M&I
Facilities, to the extent described herein. These four Cortaro M&I Facilities or systems, are
identified in Exhibit " The M&I Facilities transferred shall not include Cortaro wells,
motors and controls or well sites or the associated electric service. The existing parts, repair
and maintenance inventory of Cortaro shall be transferred and shall also be identified and
quantified in Exhibit Cortaro shall keep possession of said inventory and monthly shall
account to Marana for usage in a form acceptable to Marana. (refer to MSO Agreement).
6.3. [Replaces 5.3 thru 5.7. ] COMPENSATION FOR CORTARO M&I
FACILITIES: Upon execution of the Agreement in consideration of the transfer of
properties described in Exhibit Marana shall pay Cortaro in the manner hereinafter
described in the amount of $550,000.00, plus all attorneys fees and costs incuned by
Cortaro in negodadng this Agreement [estimated at . Exhibit lists and
describes the facilities, properties and assets , real and personal, to be conveyed to Marana by
Cortaro, and assigns to each a value and a schedule of when and how compensation is to be
paid or computed. The Operating Committee shall determine values and compensation
payment schedules for additional assets and facilities transferted in the future to Marana.
Cortaro shall have a security interest in the transfened property to the extent of the unpaid
debt. [New)) Marana shall take or suffer no action, or obligate itself or allow itself to be
obligated in any way which would alter Cortaro's priority interest in the M&I facilities
transferred to Marana until such time as Cortaro is fully compensated for such facilities.
6.4. [10.4) Encumbrance bX Cortaro: Conceming any well site used solely for
delivery of service to Mazana except for Cortaro debt of any nature existing at the time of
execution of this IGA, Cortaro shall not thereafter sell, assign or convey any right, title or
interest in or to the same without first securing a recognition and consent from the transferee
or creditor or lender to the continued right of Marana to receive the water delivery service
herein agreed upon and, i~ such event, the Parties agree Marana has a right of first refusal to
purchase the well site at a mutually agreeable price or at the price agreed upon between
Cortaro and a bona fide buyer.
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6.5. [New] CONDITION OF SALE/TRANSFER: Cortaro makes no warranty
as to t6e condition of MdtI Facilities and other property transfened to Marana and
Marana accepts all facilities property so transferred in "AS IS" condition.
6.6. [5.11) F.VA1
UATION PROR TO TR~NSFER Marana may conduct an
evaluation of the condition of Cortaro's M&I facilities, but such evaluation(s) shall be held
within 60 days and Marana will pay and be responsible for the cost. The provisions of 6.3.
above become effective upon execudon of this Agreement.
6.7. [5.13.J LITILITY TO BE SELF-SUST~INING: Marana represents and
wanants that the M&I Water Udlity will be self-sustaining, meaning the revenues generated
from water sales, charges to water customers (including, but not limited to, facility charges,
water development fees and system improvement agreements), donations and grants shall be
equal to or exceed the cost of: (1) operadng, maintaining, repairing, improving and
expanding the M&I Water Utility system; (2) covering reasonable reserves; and (3) repaying
debt financing of any kind where the proceeds of such debt financing direcdy benefit the
M&I Water Udlity. ln the event any property tax, assessment, tax or levy of any kind other
than for water sales or charges to water customers is imposed by Marana, any subdivision of
Marana or any entity created or controlled by Marana, upon the lands within Cortaro or upon
Cortaro's membership because the M&I Water Udlity is not self-sustaining as defined above,
Marana shall pay Cortaro an amount equal to any tax, assessment, or other form of levy so
imposed. The amount payable to Cortaro under this section shall be computed quarterly
through the end of March, June, September and December and paid to Cortaro no later than
the fifteenth day of the following month. This payment shall be in addition to any other
remedy available to Cortaro at law or equity arising from any breach of the representation
~ and warranty contained in this section.
6.8. [4.7] Emnloyee Considerations: In consideradon of their experience,
capabilities and qualifications, Cortaro employees whose positions are affected upon
execution of this agreement shall be given preferential consideration for employment by
Marana in addition to but not in violation of any existing law, rule and regulation.
6.9. [5.9.] Use of Purchase Price: It is intended this IGA shall not be an element
of value in any real property purchase by Marana, by the State, or by any entity using pump
tax revenues from Cortaro or any Cortaro landowner.
6.10. [5.11.2.] Cortaro Member Authorization: Transfer of any Cortaro assets or
facilities to Marana may be subject to election and ratification of this IGA by Cortaro
members. If this is true and necessary, this IGA shall not become effective until approved
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and ratified by Cortaro members, nor shall any transfer of Cortaro property or assets occur
prior to such approvaL
PART 7- PURCHASE OF WHOLESALE WATER~ PAYMENT OF
ASSESSMENTS/TAXES
7.1. [3.1.1.] AGRFFMENT TO PURCHASE WHOLESAL_•~ WATER: Pursuant
to the provisions of this Agreement, Cortaro shall sell annually at wholesale and Marana shall
purchase from and pay Cortaro for water in a quantity sufficient to meet the annual M&I
water demand of the entire Cortaro Service Area. to the extent served by Marana. Estimation
of annual demand, method of payment and other details are described in the Operation and
Management Agreement attached hereto and made a part hereof. It is contemplated in the
future Marana may have options to acquire other sources of water but the intent of the
Agreement is that Marana will pay Cortaro for the water service demands of the Cortaro
Service Area regazdless of whether actual water deliveries are requested by Marana. The
Parties may make agreements to trade or exchange waters from various sources.
7.2. [Part 6) ASSESSMENTS/Tt~X~S; STATUTORY OBLIGATION: Owners
of land within the District and Association are statutorily obligated to pay assessments and/or '
taxes of the Associadon and District. In exchange for and as a condition precedent to the
wholesaling of water by Cortaro to Marana, Marana agrees to pay Cortaro from odlity aad
ot6er proprietary revenues an amount equivalent to the annual assessment on all
District lands within Marana no longer subject to agricultural irrigation and agrees t6at
such assessments are not considered to be ta~ces. Marana agrees to pay an amount in
~ liea of taxation equivalent to taxes on property Marana owns wit6in the District.
Cortaro shall provide Marana with a map of lands and acreage inside the Association and
District subject to annual assessments and once each year, the Operating Committee will meet
to consider adjustments in the agricultural/non-agricultural designation of lands. Cortaro will
inform Marana and the Operating Committee of changes in the assessment rate as they occur.
The O&M Agreement shall contain exhibits, maps and provisions which explain procedures
for setting, calculating, paying and collecting assessments, and any other relevant details.
P 1tT 8- ELECTRICAL POWER
8.1. [Part 7] AccountinQ: The O&M Agreement shall contain extubits on methods
udlized to account for Marana's use of electrical power, Cortaro electrical power or
otherwise, in the operation of M&I Facilities of Marana. These extubits shall include a basis
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for computing charges, billing procedures and methods for separation of electrical power use
wherever facilities of Cortaro and Marana share a common electrical meter.
8.2 [7.1.1.] Recog~ition of Contract Limitation: Marana agrees that Cortaro's
contracts for electrical energy have certain limidng provisions and that in the event of non-
compliance, Cortaro shall suffer expense and harm. Understanding Cortaro's intent to supply
available electrical power resources first for agricultural water pumping and month to month
variations in available supply, Cortaro agrees to make further use of Cortaro's electrical
power entitlement available to Marana within these constraints. Cortaro shall determine, in
its sole opinion, the availability of Cortaro electrical power resources over and above those
required for agricultural purposes. To the exten~ .Marana requires production of water from
Cortaro or Cortaro to furnish water with electrical power in a manner which would violate
any provisions contained in Cortaro electric or other supply contracts Cortaro is hereby
indemnified from loss or addidonal expense by Marana.
8.3 [7.2] Reallocation: Marana and Cortaro will joindy seek and support State of
Arizona and/or Federal Government reallocation to Cortaro of its cunent electric power
entidement and joindy take any and all action necessary to preserve or enhance Cortaro's
electrical power allocations to the fullest possible extent. The Operating Committce may
recommend to the Parties joint efforts be made to secure addidonal electrical supplies from
other sources.
pt~RT 9 - WELLS, GROUNDWATER
[9.1. & 9.2.] Existing M&I Wells: Ownership and control of all currently owned
~ wells within the Cortaro Service Area shall be retained by Cortaro until otherwise provided.
Exhibit lists wells that are dedicated by Cortaro to Marana M&I Water Service. Certain
Cortaro agricultural wells connected to the M&I system for emergency backup supply will
continue to be available for this purpose. Details of well operation, notification of
uncontrollable or other forces, responsibilities, new well construcdon, availability of
additional Cortaro wells, condidons of transfer and other issues related to well operadon shall
be provided for in the 08cM Agreement.
PART 10 - WATER OUALITY
10.1 [9.3., 9.5. & 9.6.] R~,~ponsibility: CORTARO DOES NOT WARRANT
NOR GUARANTEE THAT WATER PROVIDED TO MARANA WILL BE SUITABLE
FOR POTABLE WATER SERVICE. Marana assumes full responsibility as to water quality
and the subsequent use and distribution of all water received from Cortaro. Marana will be
responsible for and pay for all costs to treat water received to meet end use water quality
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standards. Marana shall not be obligated to accept delivery of water offered by Cortaro
which does not meet water quality standards for potable water. To the extent Cortaro is
unable to provide water from an alternadve water source to meet demands within Cortaro's
Water Service Area, the amount of demand supplied by other non-Cortaro water sources shall
not be deemed part of the tak~ or pay obligation of Marana under section 7.1. The
requirement to apply standard disinfection measures or other minor treatment procedures,
such as distribudon system coatings to reduce lead exposure will not be considered to be
water quality or uncontrollable force issues which would disqualify water supplied by Cortaro
for sale to or acceptance by Marana. Notification, compliance, individual responsibility and
other water quality issues are addressed further in the O&M Agreement.
10.2 [9.6] Allocaton of Exne~c~ t~ Correct Water Q
li~y Isc~es:
10.2. l. Aquifer or Other Contamination:
(a) The Parties shall meet and mutually determine upon a course of
action.
10.2.2. Water Accented For Delivery bv Marana:
(a) Marana shall bear the cost of remedy.
10.3 Qualiq~ Problem Solutions: The Authorized Representadves shall deal with
water quality issues as they arise from the provision of water by Cortaro to Marana and will
consider the use of alternate Cortaro and Marana resources as necessary. Cortaro in its sole
~opinion will determine when and where Cortaro imgation wells and facilities are available for
conversion to production of water for MBcI Water Service of Marana, whether for
consideration as solutions to water quality problems, additional supply or otherwise.
Consistent with hold harmless and indemnification provisions in this IGA, the final decision
on changes or improvements to facilities owned by Marana which are not in compliance with
existing laws, rules and regulations goveming the provision of water to the publics to
facilities owned by, shall be at the sole discretion and authority of Marana.
~
P~RT 11 [Part 10] - JOINT USE OF CORTARO PROPERTY
11.1 The O&M Agreement, among other matters, shall contain exhibits and listings
of well sites, facilities and rights of way of Cortaro to be joindy shared with and utilized by
Marana. The O& M Agreement shall (a) include but not be limited to providing for and
describing the division of ownership in facilities located on joint-use properties, (b) shall
ascertain property entry and access conditions, (c) shall describe and locate points of
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deliveries and receipt of service, and define (d)amounts and contents of policies for liability
and property damage insurance. The Agreement will also provide (e) the applicable hold
harmless requirements of each of the Parties and the insurance to be secured for those
purposes and it further shall prescribe and set forth ( fl the process for the final transfer of
properties to Marana acquired hereunder and the transfer of other property maintenance
responsibility, rights and conditions concerning new construcdon and placement of new
facilities. The provisions of this IGA are to apply to all additional joint use well sites and
facilities, unless otherwise agreed by the Authorized Representatives.
11.2 [ 10.4] New Facilities' U~gxades: Marana and Cortaro, in coordinadon with
the Authorized Representatives, shall have the right to add new M 8t I facilities or upgrade
existing M& I facilities at all joint use well sites and each shall bear its respective expense
depending upon the nature and use of the facility or upgrade. Ownership of new or upgraded
facilities, unless otherwise mutually agreed, vest in party installing the new facilities or
improvements.
~
R~ T 12 [Part 15] - TERM OF AGREEMENT; TERMINATION PROVISIONS
12.1 [New] Term: The term of this IGA is indefinite. The intent is to establish a
long-term relationship and partnership between Marana as the M& I owner and Cortaro as
its operating agent.
12.2. [ 15 .2. ] Termination by Marana: In the event of termination of this IGA by
Marana, or the Management Services provisions therein, the provisions for payment of in lieu
taxes, assessments and other charges shall survive, including but not limit~i to Marana's
~ obligation to purchase water shall survive and it shall condnue to purchase and pay at the
prevailing Cortaro rate for all the M&I Water Service requirements of the Cortaro Service
Area and services rendered (NOTE: Marana continues to pay assessments, electrical energy
bills, etc.).
12.3. [15.3] Terminadon by Cortaro: In the event of a termination not by mutual
agreement of the Management Services provisions of this IGA by Cortaro, Cortaro shall
- continue to make available to Marana for consumpdve use non-irrigation water to the extent
then provided by Cortaro and permitted by law.
12.4. [15.4. & 15.5.] Termin_~ton Notce; Contin~uLg Obligation: Either Party,
upon two (2) year advance notice, may terminate all or a portion of the Management Service
provisions of this IGA upon written notice of termination to the other party. While it is
expressly understood and agreed either Party may terminate the Management Service
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provisions of this IGA, such terminatiot~ shall not affect the condnuing obligation of the
Parties each to the other as to other provisions of this IGA.
PART 13 - FUTURE TRANSFER OF CORTARO ASSETS
13.1. [16.1] Diminishment of A~culture: At some future time, in the event of
substantial diminishment of agricultural irrigation activity within the District, the Parties or
their Authorized Representatives may wish to consider the transfer of remaining Cortaro
assets and responsibilities to Marana. The Authorized Representatives are authorized to
consider this option and any recommendations for such transfer whenever the Authorized
Representadves mutually agree the dme is appropriate. [New} At such time, serious
consideradon shall be given to preserving and/or restructuring the unique authorities of a
Special District and the continued value of the existence of such a District to Marana.
13.2 [Part 18] Dicsoludon of Cortar~ Marana's Obli~ations: In the event Cortaro
is subsequendy dissolved, and Marana succeeds to Cortaro's assets, rights, duties and
obligations, Marana shall undertake, to the extent permitted by law, to deliver irrigadon
water to Cortaro lands in accordance with the cost of irrigation water production and continue
to deliver water to irrigable lands in Cortaro.
PART 14 ~Part
24j
OPER~TLNG COMMITTEE~ AUTHORIZED REPRESENTATIVES, MEETI CS
14.1. Authori~~ Renrec~ntadves: Marana and Cortaro shall be equally
represented on the Operating Committee and shall each designate an Authorized
~ Representative(s), by written notice to the other Party, which representative(s) shall be
authorized to act in their Parties behalf in the implementation of the Agreement and with
respect to matters contained herein which are the functions and responsibilides of the Parties,
provided no Authorized Representative(s) shall have authority to amend any of the provisions
of this IGA. Either Pariy may at any time change the designadon of its Authorized
Representative(s) by written notice to the other Party.
The initial Authorized Representative(s) shall be; (a)the Town Manager or other
designee of Marana and (b) the Manager or other designee of Cortaro, each of whom shall be
authorized to act in fulfillment of the provisions of this IGA.
14.2. rating Committee: The Authorized Representatives as designated
shall appoint equal representation to a committee to be designated the Operating Committee
which shall, together with the Authorized Representatives, mutually agree upon a schedule of
meetings or, failing agreement, shall meet monthly on the third Tuesday of each month.
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Other non-voting representatives of Marana and Cortaro may attend Operating Committee
meetings (i.e.; engineers, consultants). Each Party may call special m~tings of the
Operating Committee upon adequate notice, which shall be nvt less than five (5) working
a~ys.
The Authorized Representadves shall agree upon a rotadng schedule of responsibility
for administering committee meetings. Except as otherwise provided and as may be
consistent with budget authorizations, each Party shall bear its owns costs related to meeting
expense.
14.3. Du~to~R
1ort: Cortar~ shall report and communicate as necessary
on a regular basis to the Operating Committee, or as provided in the IGA.
PART 20 - MANAGEMENT SERVICES AND OPERATING AGREEMENT A_ND
OTHER DETAILS FOR IMPLEMENTING TH~ IGA AGREEMENT
20.1. [New] INTEGRAL PART OF IGA: The details of the management
relationship between Marana and Cortaro are set forth in a separate document tided the
Operations and Management Agreement ("O~M Agreement"), which is made a part of the
IGA Agr~ment by its reference hereto. The O&M Agreement may be revised from time to
time upon mutual agreement by the Authorized Representadve and written approval of both
the Marana Town Council and the Cortaro Board of Directors.
20.2 [ 13.5. , 2.2.7. , 9.1. , 9.2. , 9.4. ] M&I Water Service Cost ALloc~ton: This
outline excludes water service provided directly by Cortaro (i.e.; Agricultural water service,
-turf and landscaping and wholesale M&I water service).
A. Administration - Marana
B. Daily Operation & Maintenance - Marana
C. Conservation Requirements - Marana
D. New Water System Service, Facilities, Construction - Marana
E. New Wells, Conversion of Irrigation Wells - Marana
F. Design, Engineering, Studies, Consultants - Marana
G. Water Quality, Treatment, Compliance, Testing - Marana
20.3. OUTI,INE OF PARt1GRAPHS ON MANAGEMENT FUNCTIONS:
A. [4.2] Cortaro as Independent Contractor,
B. [4.1 & 4.4] Definition of Management Services, Dudes
C.[4.3.1.] Cost Basis for Services
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_
D.Payment for Services; Calculation of Payment
E. [4.4. F] Record-keeping, Reporting Requirements
F.Agreement to Purchase Water at Wholesale, Basis for Pricing Water, Price Adjustments
G.[2.2.6.] Responsibility for Costs; Maintenance & Repair, Capital Improvements/New
Construction, Well Replacement
H.Repair and Maintenance Standards & Procedures
I.[4.4. E] Employee Considerations; Transfer of Employees Affected by the IGA Agreement,
Requirement for Employee Certification/Licensing
J. What happens if Marana transfers facilities to another.
K.Operating Committee, Designation of Representatives
L.Application of Assessments
M. [8.2] Marana Budget; Only upon written authorization of Town Manager
20.3.OUTI~INE OF PARAGRAPHS ON OPERATIONAI. FUNCTIONS:
A.Forecasts of Water Use/Demand, Growih Projecdons
B.Measurement of Cortaro Service Area Deliveries, Approval Before Transfer of Water
Outside Cortaro Service Area
C.Metering; Approved Devices, Meter Inspection, Estimation During Inoperation
D.Accounting, Billing, Collections, Orders for Field Checks/Repair/Maintenance/Inspections,
Bookkeeping, Budgeting, Audits, Sales Taxes, Reserve Accounts, Estimation of Annual
Capital Expense and Operation & Maintenance Costs, Access to Records.
E.Cost Ovenvns, Authorizations
F.Inventory; Transfer, Maintenance, Accounting, Inventory Levels,
G.Coordination and Communication
' • H. Emergencies
I. Water Quality Issues, Testing, Laboratory Expense
J.Cortaro Authorization to Construct
Pt~I~T 21 - INSURANGE
21.1. [Part 21 ] Exhibit lists the minimum insurance protection of
Marana and Cortaro that this IGA requires. The Operating Committee shall annually review
and confirm that insurance coverage of both Marana and Cortaro meet the minimum
standards required.
p RT 22 - LAW;. LEGAL
22.1. [Part 19] ~tatP ~nd Feder~ Lw Reduirements: Through their
Authorized Representatives, the Parties shall review and implement and be govemed by
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~„_.M.. . _ . .
~
required laws, rules and regulations of appropriate jurisdictional entities, including those of
Marana and Cortaro.
(INSERT STANDARD LEGAL PROVISIONS: Willful Action,
Liability, Severability, Claims, Uncontrollable Force, Resolution of Disputes, Goveming
Laws, Failure to Serve, No Third Party Rights, No D~icadon of Facilides, Assignments,
Informadon Exchange, Waivers, Cancellation, Amendments, Notices, Incorporation of Sub-
Agreements and Exhibits, Headings, Time is of the Essence and Severability, Signature
Clause, Attomey Certification, Etc.)
22. ("~ner Provisions. .
A. Ti e of Essence. Time is of the essence of this Agreement and each term,
provision and condition hereof.
B. Waiver. No waiver by any Party of any default or breach by any other
Party shall be deemed to be or constitute a waiver of any other or subsequent default or
breach.
C. Bin ~~~ect. All terms, provisions and conditions hereof sha11 be
binding upon and inure to the benefit of all parties hereto and their respe~tive
representatives, successors and assigns.
D. Governin~
L,.~w_. This Agreement and the rights, duties and obligations of
the parties hereto shall be govemed and construed in accordance with the substantive laws of
~ ~the State of Arizona.
E. Soncm~ction. Paragraph headings and capkions appearing with this
Agreement are for convenient reference only and in no respect define, limit or describe the
scope or intent of this Agreement, are the product of negotiation and the Parties acknowledge
that they have been represented and advised by counsel who has participated in such
negotiation and has reviewed documentation. None of such documents shall be construed
against a party solely by reason of the preparation of such documents by a Party's attorney.
F. Suivival. This Agreement and all representations and warrandes herein
shall survive and not be merged in the execution and delivery of the Agreement.
G. Severabilj~. Unenforceability of any provision of this Agreement shall
not limit or impair the operation or validity of any other provision.
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H. Fntire gxeement. This Agreement, and the other documents
contemplated hereby or described herein which are or have been or shall be executed by the
parties hereto, accurately and completely reflect the mutual understanding of the parties
hereto and thereto as to all matters addressed herein and therein and there exist no agreements
or understandings, written or oral, between the parties and no expectations which are not
specifically set forth herein.
I. Notice. All notice provided for herein shall be hand delivered, delivered by
ovemight courier (e.g., Federal Express) or sent by certified or registered mail, return receipt
requested, addressed to all parties hereto at the address designated for each party beside its
signature or at such other address as the pariy who is to receive such notice may designate in
writing. Nodce shall be deemed completed upon: (i) such hand delivery or courier delivery
or (ii) three days after the deposit of same in a letter box or other means provided for the
posting of mail, addressed to the party and with the proper amount of postage affixed
thereto. Except as otherwise herein provided, actual receipt of nodce shall not be required to
effect notice hereunder.
J. Enforcement. In the event of breach, the party in default hereunder shall
" bear the costs of the parties who are successful in enforcing this Agreement, including
reasonable attomeys' fees, whether or not an acdon is actually filed.
g, AmPndment and Waiver. No amendment or waiver of any provision of
this Agreement shall in any event be effective unless the same shall be in writing and signed
by the Parties; and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
L. Ad iton~ Doc~mentc ~nd Acts. The parties hereto shall execute,
acknowledge, if applicable, and deliver such additional documents and to such other acts as
may be reasonably required to fully implement the intent of this Agreement.
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