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HomeMy WebLinkAboutMinutes - Municipal Property Corporation Board - 4/29/1996 MINUTES ORO VALLEY MUNICIPAL PROPERTY CORPORATION MEETING APRIL 29, 1996 TOWN COUNCIL CHAMBERS 11,000 N. LA CANADA DRIVE CALL TO ORDER: 5:04 P.M. PRESENT: Wendell Cheek, President Leslie Olson, Treasurer (by conference call) EXCUSED: Frank Butrico, Secretary STAFF PRESENT: Chuck Sweet, Town Manager Tobin Sidles, Town Attorney David Hook, Town Engineer Larry Robertson, Outside Water Counsel Hugh Holub, Rancho Vistoso Counsel RESOLUTION NO. (R)MPC96-05 - AUTHORIZING AND APPROVING THE EXECUTION OF A SUPPLEMENTAL AGREEMENT BETWEEN THE TOWN OF ORO VALLEY AND VISTOSO PARTNERS, L.L.C. AND VISTOSO GOLF PARTNERS L.L.C. AND THEIR SUCCESSORS AND ASSIGNS; AND DECLARING AN EMERGENCY Larry Robertson, Outside Water Counsel reviewed some of the background and the relationship of the agreement to the interest of the Municipal Property Corporation. Mr. Robertson explained the Supplemental Agreement Document was prepared between Vistoso Partners and the Town of Oro Valley itself. Negotiations have been completed and the drafting of the document is before the MPC today. He explained that the heart of the agreement deal with non-discrimination provisions and golf course service. Regarding Section 1 -Non-Discrimination area, the intent of the document is to reflect an intention on the part of the Town to abide by the provisions of Arizona Law, which was the intention from the outset. Section 2 deals with the subject of water service to the golf courses and, he explained in this area there have been a number of significant developments since the parties started their negotiations. At that time, Vistoso Partners anticipated it would continue in its ownership of the well that had been drilled to provide water service to the Vistoso Golf Course, and when renewable water (either CAP or treated effluent) became available for direct delivery to that golf course, Ownership of Well 22 would then be transferred to the Town. Vistoso Partners has agreed to relinquish their right under Arizona Law, to seek approval from the Arizona Department of Water Resources to go out and drill their own wells to serve their own golf courses. That relinquishment not only relates to Well 22, but also relates to 4 additional golf courses that Vistoso Partners and Vistoso Golf have contemplated building. In addition, Vistoso Partners and Vistoso Golf are agreeing to indemnify, defend and hold the town harmless for any violations of Arizona Department of Water Resource regulations that might occur from this point forward. Both Vistoso Partners and 04/29/96 Minutes, Municipal Property Corporation 2 Vistoso Golf are committing to convert to the use of renewable water when the same becomes available for direct delivery to their golf courses. At that point, they will pay whatever rate the Town establishes for renewable water for golf course service. Mr. Robertson summarized that the service arrangement would be in 3 phases - 1) Closing to "Excess Water" Contract, closing 4/30/96 until that time when renewable water becomes available (after year 2000). He explained that for the period between closing and when CAP becomes available to the Town, the Town would charge a rate that would be a combination of $100 per acre foot delivery cost+the holding cost for paying the holding charges on 339 acre feet of CAP water. He explained the Town has made the inquiries with the Arizona Department of Water Resources and the Central Arizona Water Conservation District and we have formally requested initiation of that process. In the interim, we will be negotiating for 2) an "Excess Water" Contract to Assignment CAP Subcontract. This will provide the Town with access to a central source of CAP water for the purpose of serving the golf course until the actual CAP subcontract has been formally assigned. During that period up until the assignment of the CAP subcontract to the town, the rate to be charged will be a combination of the holding costs for CAP Water + $100 per acre foot. The water actually used during that period would be groundwater. Based on hydrology studies we have access to and letters received from the Department of Water Resources, there appears to be more than enough water to serve the golf course without running any risk of violating ADWR regulations. He explained that once the Central Arizona contract has been assigned, and the Town has in place storage permits and recovery well permits to store the water in the Avra Valley area, and recover it by pumping from wells here in the Town service area, than the rate will have a new addition - actual acquisition cost for CAP + $100 delivery charge per acre foot + cost of recharging the water in a storage facility in Avra Valley 3) CAP Subcontract to Direct Delivery Renewable Water. Mr. Robertson explained that what Vistoso Partners is giving up is quite significant and addresses one of the areas the Town was being criticized for, which was the ability of someone else to drill wells into this same aquifer for the purpose of watering golf courses. This agreement now provides that that control will reside in the Town and its water system under the pricing structure described. Treasurer Olson MOVED to APPROVE Resolution No. (R)MPC96-05 authorizing and approving the execution of a supplemental agreement between the Town of Oro Valley and Vistoso Partners, L.L.C. and Vistoso Golf Partners L.L.C. and their successors and assigns, and declaring an emergency. MOTION SECONDED by President Cheek and carried 2 - 0. 04/29/96 Minutes, Municipal Property Corporation 3 ADJOURNMENT Meeting adjourned at 5:25 p.m. Respectfully submitted, df Kathryn Cuvelier, CMC Town Clerk