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AGENDA ORO VALLEY TOWN COUNCIL REGULAR SESSION NOVEMBER 17, 1999 ORO VALLEY COUNCIL CHAMBERS 11,000 N. LA CANADA DRIVE EXECUTIVE SESSION AT OR AFTER 5:30 PM 1. Pursuant to ARS 38-431.03 (A)(7) Legal Advice relating to the acquisition of property for the La Canada Drive Extension 2. Pursuant to ARS 38-431.03(A)(1) Personnel Matters relating to Development Review Board Chairperson Patti Jo Lewis 3. Pursuant to ARS 38-431.03(A)(3) to obtain legal advice relating to Tortolita v. Town of Oro Valley Cause No. 328365 and related cases and matters REGULAR SESSION AT OR AFTER 7:00 PM CALL TO ORDER ROLL CALL PLEDGE OF ALLEGIANCE UPCOMING MEETING ANNOUNCEMENTS — TOWN MANAGER The Mayor and Council may consider and/or take action on the items listed below: ORDER OF BUSINESS: MAYOR WILL REVIEW THE ORDER OF THE MEETING CALL TO AUDIENCE — According to the Arizona Open Meeting Law, the Town Council may only discuss matters listed on the Town Council Agenda. Matters brought up by the public under "Call to Audience" cannot be discussed by the Town Council as they have not been placed on the agenda. Any items must be addressed to the whole Council, not a specific member. In order to speak during "Call to Audience'; please specify what you wish to discuss when completing the blue speaker card. 1. CONSENT AGENDA (Consideration and/or possible action) A. Minutes — 10/27/99; 11/01/99; 11/03/99 B. Approval of Budget and Bond Committee Recommendation to designate the terms of Budget and Bond Committee members, Barton Rochman and Jack Longley as one year terms, to expire June 30, 2000 11--7-99 Agenda, Council Regular Session 2 C. OV12-97-17B Copper Ridge II, Amendment of Assurance Agreement by extending the expiration date to October 1, 2000 D. 0V12-99-17 Pusch Ridge Daycare/Office Complex Development Plan (located along Oracle Road and surrounded on the other three sides by the Rock Ridge Apartments) E. OV12-99-17 Pusch Ridge Daycare/Office Complex Landscape Plan (located along Oracle Road and surrounded on the other three sides by the Rock Ridge Apartments) F. Resolution No. (R)99-109 Approving the purchase of a new Motor Grader and amending the Highway Fund Budget for FY 1999-2000 G. Resolution No. (R)99-110 Approval of an Intergovernmental Agreement between the Central Arizona Water Conservation District & the Town of Oro Valley for the delivery of Central Arizona Project Incentive Recharge Water 2. PRESENTATION REGARDING THE CENSUS 2000 ACTION PLAN BY EUGENIA BAS-ISAAC, Ed.D. 3. PRESENTATION OF CERTIFICATE OF APPRECIATION TO DESERT POINT RETIREMENT COMMUNITY FOR $850 DONATION TO COYOTE RUN 4. APPOINTMENT OF MEMBER TO THE WATER UTILITY COMMISSION EFFECTIVE 11-17-99 TO 6-30-2000 AND TO ASSIGN THE CONSTITUENCY OF EACH MEMBER AS REQUIRED BY CHAPTER 15 OF THE ORO VALLEY TOWN CODE 5. PUBLIC HEARING — ORDINANCE NO. (0)99- 58 AMENDING THE ORO VALLEY TOWN CODE, CHAPTER 15, ARTICLE 15-4-5, CHANGING THE DUE DATE OF THE ANNUAL REPORT RENDERED BY THE ORO VALLEY WATER UTILITY COMMISSION 6. PUBLIC HEARING — ORDINANCE NO. (0)99-57 RELATING TO THE PRIVILEGE LICENSE TAX; ADOPTING "THE 1999 AMENDMENTS TO THE TOWN TAX CODE OF THE TOWN OF ORO VALLEY, ARIZONA" BY REFERENCE; ESTABLISHING AN EFFECTIVE DATE AND PROVIDING PENALTIES FOR VIOLATIONS THEREOF (Continued from 11/03/99) 7. APPROVAL OF MEMBERSHIP AND PARTICIPATION OF THE TOWN OF ORO VALLEY IN THE SOUTHERN ARIZONA WATER USERS ASSOCIATION TOWN MANAGER'S REPORT ENGINEER'S REPORT FINANCE DIRECTOR'S REPORT 11- *-99 Agenda, Council Regular Session 3 COMMUNITY DEVELOPMENT DIRECTOR'S REPORT POLICE CHIEF'S REPORT WATER UTILITY DIRECTOR'S REPORT COUNCIL COMMITTEE REPORTS CALL TO AUDIENCE— According to the Arizona Open Meeting Law, the Town Council may only discuss matters listed on the Town Council Agenda. Matters brought up by the public under "Call to Audience"cannot be discussed by the Town Council, as they have not been placed on the agenda. Any items must be addressed to the whole Council, not a specific member. In order to speak during "Call to Audience'; please specify what you wish to discuss when completing the blue speaker card. ADJOURNMENT POSTED: 11/10/99 4:30 P.M. Ih A packet of agenda materials as listed above is available for public inspection at least 24 hours prior to the Council meeting in the office of the Town Clerk between the hours of 8:30 a.m. 5:00p.m. The Town of Oro Valley complies with the Americans with Disabilities Act (ADA). If any person with a disability needs any type of accommodation, please notify Kathryn Cuvelier, Town Clerk, at 297-2591. 11 '-99 Agenda, Council Regular Session 4 INSTRUCTIONS TO SPEAKERS Members of the public have the right to speak during any posted public hearing. However, those items not listed as a public hearing are for consideration and action by the Town Council during the course of their business meeting. Members of the public may be allowed to speak on these topics at the discretion of the Chair. If you wish to address the Town Council on any item(s) on this agenda, please complete a speaker card located on the Agenda table at the back of the room and give it to the Town Clerk. Please indicate on the speaker card which item number and topic you wish to speak on, or if you wish to speak during "Call to Audience", please specify what you wish to discuss when completing the blue speaker card. Please step forward to the podium when the Mayor announces the item(s) on the agenda which you are interested in addressing. 1. Please state your name and address for the record. 2. Speak only on the issue currently being discussed by Council. Please organize your speech, you will only be allowed to address the Council once regarding the topic being discussed. 3. Please limit your comments to 3 minutes. 4. During "Call to Audience" you may address the Council on any issue you wish. 5. Any member of the public speaking must speak in a courteous and respectful manner to those present. Thank you for your cooperation. MINUTES ORO VALLEY TOWN COUNCIL REGULAR SESSION OCTOBER 27, 1999 ORO VALLEY COUNCIL CHAMBERS 11,000 N. LA CANADA DRIVE REGULAR SESSION AT OR AFTER 5:30 PM CALL TO ORDER 5:40 p.m. ROLL CALL PRESENT: Paul Loomis, Mayor Dick Johnson, Vice Mayor Paul Parisi, Council Member Wayne Bryant, Council Member(Arrived at 5:42 p.m.) Fran LaSala, Council Member (Arrived at 5:45 p.m.) EXECUTIVE SESSION AT OR AFTER 5:30 PM MOTION: A MOTION was made by Vice Mayor Johnson and SECONDED by Council Member Parisi to go into Executive Session at 5:40 p.m. Motion carried, 3 —0. Mayor Loomis announced that in addition to the Town Manager, the Town Clerk, and the Town Attorney, that Water Utility Director David Hook and Hugh Holub, Consultant, would be present for Item 1*, Community Development Director Brent Sinclair would be present for Item 2** and Finance Director David Andrews and Economic Development Director Jeff Weir would be present for Item 3***. The Executive Session was called for the following purpose: Pursuant to ARS 38-431.03(A)(3) Legal Advice relating to: * 1. Tucson Water Service Area within and outside the town limits of Oro Valley ** 2. OV 12-98-22 Stone Canyon II Final Plat (Trailhead Requirement) ***3. Entering into a Development Agreement with Southwest Properties (Radisson Resort Hotel) 4. Kai Pre-Annexation Agreement—Request for Extension Pursuant to ARS 38-431.03(A)(4) Legal Advice relating to pending litigation: 1. City of Tucson v. Woods and related cases - Pima County Cause No. 320926 2. Tortolita v. Town of Oro Valley - Pima County Cause No. 328365 MOTION: A MOTION was made by Vice Mayor Johnson and SECONDED by Council Member LaSala to go out of Executive Session at 6:35 p.m. Motion carried, 5 — 0. RESUME REGULAR SESSION AT OR AFTER 7:00 PM 10-27-99 Minutes, Council Regular Session 2 CALL TO ORDER 7:03 p.m. ROLL CALL PRESENT: Paul Loomis, Mayor Dick Johnson, Vice Mayor Paul Parisi, Council Member Fran LaSala, Council Member Wayne Bryant, Council Member PLEDGE OF ALLEGIANCE Mayor Loomis led the audience in the Pledge of Allegiance. UPCOMING MEETING ANNOUNCEMENTS Town Manager Chuck Sweet reviewed the upcoming meetin s. He also announced that Town Hall Offices would be closed Thursday, November 11th in honor of Veteran's Day. Mr. Sweet also introduced new employees, Martin Roush, Transportation Planner, and Lory Warren, Street Superintendent. CALL TO AUDIENCE Alan Lathrem, 1750 W. Tangerine Road, stated that regarding Agenda Item 10, he was hopeful that Oro Valley and Tortolita could cooperate on the DARE officer issue at Wilson School. He also thanked the Council for their interest in continuing the program. Louis Benson, 2590 W. Tortolita Hills Trail, reviewed a timeline on the incorporation of Tortolita. He also apologized to Council for any harsh words that were said during the process. He asked Council to consider the same action that the City of Tucson has taken with regards to Tortolita. Mr. Benson stated that he would like to "extend an olive branch" from Tortolita to Oro Valley and said that they would like to be good neighbors. Nick Vale, 892 Bentwater Place, expressed his support for Agenda Item 7, Compensation for Mayor and Council. He stated that the Compensation Study Committee talked with many citizens regarding the plan and there was very little negative comment received. Mr. Vale also stated that he felt that if any of the Council Members voted against the passing of the compensation plan, they should not then accept the compensation. 1. CONSENT AGENDA Mayor Loomis pulled Item F and Item B from the Consent Agenda at the requests of Council Member LaSala and Council Member Bryant. MOTION: Vice Mayor Johnson MOVED to approve Consent Agenda Items A, B, D, and E. Council Member LaSala SECONDED the motion. Motion carried, 5 —0. 10-27-99 Minutes, Council Regular Session 3 A. Minutes—09-29-99; 10-06-99; 10-14-99 B. Building Safety Division Activity Report—August & September 1999 C. Finance Report—August 1999 (PULLED FOR DISCUSSION) D. Police Report— September 1999 E. The Chamber of Northern Pima County Quarterly Report—July 1, 1999— September 30, 1999 F. Resolution No.(R)99-100 Approval of a contract with Westland Resources Inc. to Prepare Improvement Plans for Landscaping Four Sites in the amount of$24,200 (PULLED FOR DISCUSSION) C. FINANCE REPORT—AUGUST 1999 In response to a question from Council Member Bryant regarding the Public Transportation Fund, Finance Director David Andrews explained that the $18,729 (Revenues Less Expenditures line) shows as a negative number because the Lottery Funds (LTAF) have not as yet been received from the State. MOTION: Vice Mayor Johnson MOVED to APPROVE the Finance Report. Council Member Parisi SECONDED the motion. Motion carried, 5 —0. F. RESOLUTION NO.(R)99-100 APPROVAL OF A CONTRACT WITH WESTLAND RESOURCES INC. TO PREPARE IMPROVEMENT PLANS FOR LANDSCAPING FOUR SITES IN THE AMOUNT OF $24,200 Council Member LaSala expressed concerns regarding a Landscape Contract being awarded to a Water and Civil Engineering firm. Water Utility Director David Hook referred to a memorandum sent to Town Manager Chuck Sweet and further explained that there would be four consultants involved in the project (a Landscape Architect, a Structural Engineer, a Surveyor and a Civil Engineer.) He explained that all four consultants would have a substantial role in the completion of the project. Mayor Loomis stated that he felt that the project was a general task project and was something that could be accomplished by a number of different contractors. He expressed his concern that the project did not go out to bid. He stated that on a job such as this where the opportunity exists for other contractors to compete, he felt it was in the best interest of the Town to compete the issues. Mayor Loomis also asked that Council consider directing staff to bring a policy to Council for contracting professional services where it may be in the best interest of the Town to bid it competitively by sole source. In answer to a question from Council Member Bryant, Mr. Hook explained that in the past, the Town has not used a landscape contractor in a sub-contractor role on water related projects. 10-27-99 Minutes, Council Regular Session 4 Further discussion followed regarding the elements of timing and whether the Town would be getting the best deal for the money spent. MOTION: Council Member LaSala MOVED to DENY the Westland contract proposal as presented and to direct staff to proceed with the wall, landscaping and related improvements at Water Plant#18 under the Town Manager procurement authority and further direct staff to issue a Request for Proposals for the remainder of the work contemplated and to direct staff to bring a policy to Council for contracting professional services where it may be in the best interest of the Town to bid it competitively by sole source. Council Member Bryant SECONDED the motion. Motion carried, 5 —0. 2. PRESENTATION OF CERTIFICATES OF APPRECIATION TO CATALINA BOY SCOUT TROOP #299 FOR THEIR ASSISTANCE WITH THE 1999 LEAGUE OF ARIZONA CITIES AND TOWNS Mayor Loomis thanked the Boy Scouts, Troop #299, for their help in assembling materials for the League of Arizona Cities and Towns Conference. Certificates of Appreciation and tote bags were presented to: Joe Cruz, Kyle Dehn, Andrew Polo, Nicholas ReDavid, Ryan Simms, Scott Simms, Alex Smith, Chris Smith, Kyle Smith, Josh Snider, Andrew Soldin, and Kyle Williams. I DRAWING TO CHOOSE A LUCKY WINNER FROM A POOL OF ENVIRONMENTAL SENSITIVE LANDS ORDINANCE SURVEYS AND RECOGINIZING RICHARD UNDERWOOD, AAA LANDSCAPING FOR HIS PRIZE DONATION MOTION: Council Member LaSala MOVED to CONTINUE Item#3 to the November 3, 1999 Council meeting. Council Member Bryant SECONDED the motion. Motion carried, 5 — 0. 4. 2000-01 CAPITAL IMPROVEMENT PLAN—RATIFICATION OF TECHNICAL ADVISORY COMMITTEE AND APPOINTMENT OF A COUNCIL MEMBER MOTION: Council Member LaSala MOVED to RATIFY the list of Capital Improvement Plan Technical Advisory Committee members and the appointment of Vice Mayor Dick Johnson as the Council liaison and Mr. Dave Williams as the citizen representative. Motion SECONDED by Council Member Bryant. Motion carried, 5 —0. (Members ratified were: David Andrews, Kathi Cuvelier, Todd Jaeger, Bill Jansen, Ron Koslowski, Doug White, Ainsley Reeder, Charlie Lentner, Bill Partridge, Dan Dudley, Brent Sinclair, Chuck Sweet, Jim Vogelsberg. Support Staff: Bryant Nodine, Bayer Vella, Mary Rallis, Jeff Wier, and Nina Trasoff as Facilitator.) Mayor Loomis recessed the meeting at 7:37 p.m. The meeting resumed at 7:45 p.m. 10-27-99 Minutes, Council Regular Session 5 5. RESOLUTION NO. (R)99-101 OV9-95-20 KAI PROPERTY DEVELOPMENT AGREEMENT EXTENSION REQUEST (PROPERTY LOCATED AT THE SOUTHEAST CORNER OF TANGERINE ROAD AND NORTH FIRST AVENUE) Community Development Director Brent Sinclair reported that the Kai property was annexed into the Town of Oro Valley in 1994. On October 3, 1995, the Kai's entered in a development agreement with the Town. He explained that one of the conditions of the agreement was that the agreement would automatically terminate after five (5) years without an extension (November 3, 1999.) Mr. Sinclair stated that the development agreement included provisions for not more than 1,300 dwelling units, a golf course, hotel and related uses, and retail and office uses. Mr. Sinclair explained that staff has issues with the fact that the development agreement as approved in 1994, states that the development agreement has to comply with the ordinances that were approved at that time. He explained that as approved in 1994, the property would not have to comply with the Town's new ordinances such as: Riparian Habitat Protection Overlay District, Cultural Resource Preservation, Golf Course Overlay Zone, Hillside Development Zone, Grading Limitation, and Design Guidelines and the Native Plant Salvage and Landscaping. Without the application of said ordinances, staff would recommend that the Extension for the Kai Property Development Agreement be denied. In response to a question from Council Member LaSala, Town Manager Chuck Sweet reported that the Town has not done anything to impede the progress or to prevent the owner from developing the property. Mayor Loomis opened the floor for public comment. Due to time restraints, Mayor Loomis limited the speakers to two (2) supporting the extension, two (2) opposed, and one speaker who was undecided. (Speaker cards were also received by the following citizens: SUPPORT- John Kai, Donna Johnson OPPOSE- Joan Gallagher, Bill Adler, Brady Buckley, Sue Hayes, Nancy Young Wright, Richard Feinberg, Karen Rogers, Patty Estes, Carl Boswell, Rochelle Carls, Chris Carls, Paul Harrington, Robert Esposito OPPOSITION OR SUPPORT NOT NOTED- Rosalie Roszak Sid Felker, 50 W. Linda Vista, attorney representing the owners, stated that the Kai family has owned the property for over fifty (50) years. He stated that the Kai's wanted to develop the property is such a way that would compliment the neighborhood and the Town. He explained that the extension of the development agreement was simply an opportunity to continue working with the surrounding neighbors. 10-27-99 Minutes, Council Regular Session 6 In response to a concern expressed by Council Member LaSala, Mr. Sinclair explained that the current zoning of the property is R1-144. If the development agreement is not extended, it remains that zoning and all Oro Valley Codes and Ordinances would apply to the property. Patrick Driscoll, 1491 E. Triton, stated that the proposed development would not provide anything for children. He stated that if the proposed high school had been built on the site, it would have provided recreation facilities within walking or bicycling distance for the children in the area. Mr. Driscoll stated that if the property were developed as mentioned, then there would be consistent traffic in the area. He asked that the children be considered when looking at the development of the property. Mr. Driscoll also stated that he would like to be invited to attend the negotiations with the property owners and the neighbors. Army Curtis, 11991 N. Labyrinth Drive, stated that he has been involved in the meetings with the developer and the neighbors. He stated that he also has concerns regarding traffic, but feels that the owners have treated the neighbors fairly and they encouraged the neighbor's involvement. Mr. Curtis stated that he felt that the extension should be granted and that the agreement could be amended to include the new Oro Valley standards. He stated that he wanted to see the area master planned and not have to go back through the rezoning process. In response to a question from Council Member LaS ala, Mr. Sweet explained that if the extension were not approved, the property owner could go back through the application process for rezoning. Paula Abbott, 10773 N. Glenn Abbey, stated that the proposed project is more intense than permitted under the General Plan. She urged Council to reject the request for an extension of the development agreement. She also stated that the needs of the children have not been met and that should be considered when looking at the property's development. Hector Conde, 14040 N. Lobelia, stated that despite public outrage about water waste and water scarcity, and the water table decline, another golf course is being planned. He also stated that to add another golf course, 1300 dwellings, a hotel, and retail and office spaces, would add 30,400 daily automobile trips. This would add a proportionate increase in noise, pollution, and irritation to the public at large. He recommended that Council deny the extension. MOTION: Council Member Bryant MOVED to DENY Resolution(R)99-101, OV9-95- 20, Kai Property Development Agreement Extension. Council Member LaSala SECONDED the motion. 10-27-99 Minutes, Council Regular Session 7 DISCUSSION: Vice Mayor Johnson stated that the ultimate development of the property was not being terminated. He stated that he felt that the property needed to go back and the new ordinances needed to be applied. He stated that the property would go through the process with the neighbors, the owner, and the developer and the ultimate product would be better and a greater asset to the Town. Council Member Parisi stated that he was opposed to Sunset Clauses as many times they force the developer to build prematurely. He stated that he voted for the Ordinances (as listed by Mr. Sinclair) to make Oro Valley a better community. He stated that he felt that the property should be built under the new current standards. Mayor Loomis stated that he was opposed to pre-annexation agreements. He said that the development has an opportunity to move forward under the current processes. He explained that by denying the extension, the pre-annexation agreement would be eliminated. The property can go through a rezoning process as a"fresh" piece of property. CALL FOR THE QUESTION MOTION to DENY, carried 5 — 0. Mayor Loomis moved Agenda Item #10 forward. 10. RESOLUTION NO. (R)99-103 DISCUSSION AND POSSIBLE PROVISION OF "DARE PROGRAM SERVICES" TO WILSON SCHOOL BY ENTERING INTO AN INTERGOVERNMENTAL AGREEMENT WITH AMPHITHEATER SCHOOL DISTRICT Town Manager Chuck Sweet reported that Resolution No. (R)99-103 would approve the continuation of the DARE Program Services at Wilson School. He explained that this was a result due to action by Judge Warner involving a temporary injunction against Oro Valley to serve areas to the west of the Town that were annexed in 1997. He explained that the Amphitheater School District has approved the Intergovernmental Agreement as presented. Town Attorney Dan Dudley stated that signed injunction from the Court has not as yet been received. Therefore, if the resolution were approved by Council, it would take effect subject to the Court's injunction (provided for as a condition of approval.) He further explained that he felt that the resolution provides for a service and not an exercise of Police Power Jurisdiction. Council Member LaSala stated that most of the children that attend Wilson School live in Oro Valley. He said that his prime concern was for the children. He also explained that he was contacted by Mr. Steve Shocat, Vice Mayor of Tortolita. Mr. Shocat stated that 10-27-99 Minutes, Council Regular Session 8 they also were passing a resolution in favor of Oro Valley providing a DARE Officer at Wilson School. Council Member Bryant stated this would provide an example of three governments working together on a common ground. He then read the Town of Tortolita's Resolution providing support of the DARE Program Services at Wilson School. Mayor Loomis opened the floor for public comment. Paul Abbott, 10773 N. Glen Abbey, voiced her support for the DARE Officer at Wilson School. She stated that the DARE program is a great program and she was pleased to see the children's interests were placed first. John Ritchie, 1230 W. Ghost Place, principal of Wilson School, spoke in support of Officer Tolentino remaining at Wilson School as a DARE Officer. He stated that Officer Tolentino is a great asset to school and is the "heart" of the program and makes the programs come to life for the students. Mr. Ritchie stated that the students are receptive to his message. He strongly urged Council to approve the Intergovernmental Agreement to provide the services for the DARE Program to continue at Wilson School. He also requested that Council consider other services to the school. Mayor Loomis recognized and thanked Officer Ferdie Tolentino for his work as a DARE Officer. Mr. Dudley explained that other services could be provided as long as they were not an exercise of Police Power Jurisdiction and as long as the Judge order does not prohibit such services. MOTION: Council Member LaSala MOVED to AUTHORIZE the Mayor of Oro Valley to enter into an Intergovernmental Agreement with Amphitheater Unified School District No. 10, for the provision of DARE Program Services to Wilson School, as long as the entering into this Intergovernmental Agreement is consistent with the Court Order of Judge Nanette Warner in the case of Tortolita v. Town of Oro Valley. Council Member Bryant SECONDED the motion. AMENDMENT TO THE MOTION: Mayor Loomis asked to include "and other safety services." Council Member LaSala and Council Member Bryant agreed to the amendment. MOTION AS AMENDED carried, 5 —0. Mayor Loomis recessed the meeting at 8:27 p.m. The meeting resumed at 8:37 p.m. 6. RESOLUTION NO. (R)99-102 CONSIDERATION AND POSSIBLE APPROVAL OF A DEVELOPMENT AGREEMENT BETWEEN THE TOWN OF 10-27-99 Minutes, Council Regular Session 9 ORO VALLEY AND SOUTHWEST PROPERTIES, INC. (RADISSON RESORT HOTEL) Economic Development Administrator Jeff Weir presented an overview of the proposed Development Agreement for Rancho Vistoso Resort Project and the Community Economic Development Strategy. He explained that some of the criteria considered when looking at the Development Agreement were: meeting the goals of the General Plan, increased revenues for the Town, consideration of the benefits to the existing retail businesses, added retail sales opportunities, and recognition of the importance that a new business shall offer opportunities for tax generation. In response to a question from Council Member LaSala, Penny Wolfswinkel, Southwest Properties, explained that their company has been in Arizona for forty-one (41) years, and have completed development projects in every county in Arizona as well as some projects in Colorado and New Mexico. She explained that the partners in the project are Southwest Properties, Radisson Hotels (operating partner) and a group of equity partners. Mayor Loomis opened the floor for public comment. David Williams, 362 W. Spearhead, stated that he had concerns regarding the development agreement. He stated that he felt that Radisson Hotels had enough money to do the project by themselves. He stated that if the agreement were approved, he hoped that everything is written out. MOTION: Vice Mayor Johnson MOVED to CONTINUE this item indefinitely and bring it back at an appropriate time. Council Member Parisi SECONDED the motion. DISCUSSION: Council Member Parisi stated that he had strong feelings toward business. The Town should take a look at its attitude and approach to all businesses in Oro Valley. Council Member LaSala stated that he felt that "fast tracking" should be used for all businesses. He also applauded the Radisson for wanting to give something back to the children by being willing to provide programs. He further stated that he is opposed to the concept of sharing monies and did not think it was appropriate for this project. Council Member Bryant stated that he felt that government should not get into the business of building hotels and that he did not agree with"corporate welfare." Mayor Loomis stated that if this item were to be continued, he would like to see a Study Session held to provide Council with further information regarding incentives and what surrounding communities are doing and what various industries expect. He also said that one of the elements that was seriously considered during the Focus 2020 General Plan process was Economic Stability. It was recommended by those attending, that the Town consider the Tourist Industry, Resorts, and Hotels as they do not require the normal services from the Town that other entities do. Mayor Loomis asked that the cost of 10-27-99 Minutes, Council Regular Session 10 services to a resort and the cost of services to "typical" areas be compared (items for comparison police services, public works services, etc.) CALL FOR THE QUESTION: Motion for continuance carried, 4— 1, with Council Member LaSala opposed. 7. PUBLIC HEARING - ORDINANCE NO. (0)99-53 AN ORDINANCE ESTABLISHING A COMPENSATION PLAN FOR MAYOR AND COUNCIL MEMBERS, EFFECTIVE JULY 1, 2000 Mayor Loomis declared a conflict of interest and turned over the gavel to Vice Mayor Johnson. Town Manager Chuck Sweet reported that on August 18, 1999, the Compensation Study Task Force recommended that the Town Council implement a Compensation Plan. The recommended compensation is $11,400 for the Mayor and $9,000 for the Council Members and would take effect on July 1, 2000. In response to a question from Council Member Bryant, Town Attorney Dan Dudley stated that under Arizona Law, the Council does not have the authority to refer the recommendation for compensation to the ballot. He stated that the Council must make that decision, but the public would have the power of referendum if they so desired. Council Member LaSala stated he also felt that the citizens should have the say in whether the Council should be paid, but it appears by law, that the Council has an obligation to make this decision. Vice Mayor Johnson opened the public hearing. Bill Adler, 10720 N. Eagle Eye Place, stated that he saw no explanation included in the Council Communication that gives justification for approving compensation. He asked Council for justification of the compensation and suggested that it be continued until adequate information is provided for the citizens to review. Emily Anne Sleigh, 12417 N. Copper Queen Way, stated that by providing wages for the Mayor and Council, citizens that may not otherwise be able to run for those offices may have a better opportunity to give their time to participate in local government. She stated that she was in favor of the compensation and that the Mayor and Council deserved to get some benefit back for their hard work. Vice Mayor Johnson closed the public hearing. Vice Mayor Johnson stated the Compensation Task Force study indicated that Oro Valley is the largest town that does not compensate the Mayor and Council. He suggested that compensation might attract more qualified candidates. 10-27-99 Minutes, Council Regular Session 11 Council Member Bryant stated that he does not support the compensation and feels that the item should go before the citizens rather by initiative or referendum. Council Member LaSala stated that the Task Force Committee was appointed from a group of volunteers. He stated that to his knowledge, no council members participated in any of the Committee's meetings. He stated that the Committee publicized their meetings, worked with the League of Cities and Towns, contacted citizens, and compiled statistics and should be commended for their efforts. MOTION: Council Member Parisi MOVED to APPROVE Ordinance No. (0)99-53, compensation for the Mayor and Council effective July 1, 2000. Motion carried, 3 — 1 with Council Member Bryant opposed. Mayor Loomis returned to the meeting. 8. PUBLIC HEARING - ORDINANCE NO. (0)99- 55 AMENDING POLICY NO. (10) ATTENDANCE AND LEAVES OF THE TOWN PERSONNEL POLICY REGARDING TRANSFER OF SICK LEAVE TO ANNUAL VACATION LEAVE Town Manager Chuck Sweet reported that Ordinance No. (0)99-55 would provide for the transfer of unused sick leave to annual (vacation) leave. A minimum balance of 480 hours of sick leave would be required by the employee. The transfer of sick leave is limited to up to seven days being transferred to vacation annually. In response to a question from Council Member LaSala, Human Resources Director Jeff Grant explained that the Town currently has a long-term disability plan which is in effect after 90 days of disability. He explained that the town does not have a short-term disability program in place. He reported that the Employee Focus Group and the Fraternal Order of Police proposed that the Town adopt a program to off-set the waiting period. In response to a question from Mayor Loomis and Council Member LaSala, Mr. Grant stated that currently employees can transfer sick leave, comp time or vacation time to other employees to use as sick leave. Mayor Loomis opened the public hearing. There being no speakers, the public hearing was closed. MOTION: Council Member LaSala MOVED to ADOPT Ordinance No. (0)99-55 amending the Town of Oro Valley Personnel Polices and Procedures Code. Vice Mayor Johnson SECONDED the motion. Motion carried, 5 —0. 9. PUBLIC HEARING—ORDINANCE NO. (0)99-56 AMENDING THE ORO VALLEY TOWN CODE, CHAPTER 6, SECTION 6-1-5, TO ESTABLISH A PUBLIC ART SELECTION COMMITTEE REVIEW PROCESS, PROVIDE EVALUATION CRITERIA, AND DEFINING GOVAC'S ROLE, RELATED TO 10-27-99 Minutes, Council Regular Session 12 MAJOR PUBLIC CONSTRUCTION PROJECTS AS IDENTIFIED IN THE TOWN'S CAPITAL IMPROVEMENT PLAN Community Development Director Brent Sinclair reported that Ordinance No. (0)99-56 clarifies the review and selection process for Public Art in Public Places. It also places the policy in the Town Code instead of the Zoning Code, sets Evaluation Criteria, identifies the Public Art Selection Committee process, establishes the Greater Oro Valley Art Council's (GOVAC) role, and sets procedures for accepting unsolicited art proposals. Mr. Sinclair referenced Section 6-1-5 and recommended that the following wording be added: "Any funds deposited from highway projects must be used within the public right- of-way." Mayor Loomis opened the public hearing. Anne Sleigh, 12417 N. Copper Queen Way, stated that this ordinance would open up a quagmire. She recommended that the Town hire an art consultant. Mayor Loomis closed the public hearing. MOTION: Vice Mayor Johnson MOVED to APPROVE Ordinance No. (0)99-56 adopting amendments to the Oro Valley Town Code, Section 6-1-5, Public Art Provisions, as attached and to include the wording recommended by Mr. Sinclair: "Any funds deposited from highway projects must be used within the public right-of-way." Council Member LaSala SECONDED the motion. Motion carried, 5 — 0. TOWN MANAGER'S REPORT Town Manager Chuck Sweet asked Council to submit their Holiday Scheduling Form to help schedule Study Sessions, etc. for the upcoming months. ENGINEER'S REPORT Town Engineer Bill Jansen referenced a summary of the road projects that have been scheduled through the Pima Association of Governments for the next five-year period. He stated that approximately $23 million worth of projects would be coming into the town through STP and HURF funding. FINANCE DIRECTOR'S REPORT Finance Director David Andrews reported that the Budget and Bond Committee met Monday, October 25th. They will be reporting back to Council on December 1, 1999. 10-27-99 Minutes, Council Regular Session 13 COMMUNITY DEVELOPMENT DIRECTOR'S REPORT No report. POLICE CHIEF'S REPORT Police Chief Wolff reported that on October 14th, an emu was captured in the area of Woodburne and Moore Avenues. On October 19th, another emu was sited near Naranja Drive and Sawtooth Drive, but it escaped. Chief Wolff also reported that on October 20th, Office Ed Holdinsky stopped a speeding vehicle traveling on Oracle Road at 73 mph. The vehicle was stolen in San Diego and the occupants had committed two burglaries. He also reported that one of the occupants of the vehicle was wearing a bullet-proof vest. WATER UTILITY DIRECTOR'S REPORT No report. COUNCIL COMMITTEE REPORTS Vice Mayor Johnson reported that the proposed Pedestrian Multi-Use Path on Lambert Lane is approximately three months from completion of design. At that time, the project will go out to bid. He also reported that the Library Design Task Force would be interviewing three short-listed architects. Council Member LaSala reported that he was very encouraged by the first meeting of the Budget and Bond Committee meeting. Council Member Parisi reported that the field of applicants for the Police Chief has been narrowed down to six applicants. He stated that the assessment for the candidates would be held November 9th and 10th Council Member Bryant reported that the Water Utility Committee would be meeting with the Council on Monday, November 1st to discuss alternative water resources. Mayor Loomis reported that Pima Association of Governments met for their regional meeting this morning (October 27th) and then they all met with Maricopa Association of Governments. He stated that the meeting shows that the urban communities are working together with the Arizona Department of Transportation. CALL TO AUDIENCE Duane Delarco, 11484 N. First Avenue, encouraged the Town to work with the DARE and GREAT programs that are provided by the Police Department. He stated that the time spent with the officers through these programs provide the children with a 10-27-99 Minutes, Council Regular Session 14 wonderful opportunity to see the "human" side of the Police Department and to deal with the officers "one on one." ADJOURNMENT MOTION: Council Member LaSala MOVED to ADJOURN the meeting at 9:37 p.m. Vice Mayor Johnson SECONDED the motion. Motion carried, 5 — 0. Respectfully submitted, n Roxana Garrity, Deputy Town Clerk I hereby certify that the foregoing minutes are a true and correct copy of the minutes of the regular session of the Town of Oro Valley Council of Oro Valley, Arizona held on the 27th day of October, 1999. I further certify that the meeting was duly called and held and that a quorum was present. Dated this day of , 1999. Kathryn E. Cuvelier, CMC DP ray MINUTES ORO VALLEY TOWN COUNCIL STUDY SESSION NOVEMBER 1, 1999 ORO VALLEY TOWN COUNCIL CHAMBERS 11,000 N. LA CANADA DRIVE STUDY SESSION—AT OR AFTER 6:00 P.M. CALL TO ORDER 6:02 p.m. ROLL CALL PRESENT: Paul Loomis, Mayor Dick Johnson, Vice Mayor Paul Parisi, Council Member Fran LaSala, Council Member Wayne Bryant, Council Member 1. DISCUSSION REGARDING ALTERNATIVE WATER RESOURCE RECOMMENDATIONS David Hook, Water Utility Director reviewed with the Mayor and members of the Council the recommendations of the Renewable Water Resources subcommittee and the Water Utility Commission. The four projects considered were: 1. Central Arizona Project Transmission System 2. Town of Oro Valley Reclamation Facility and Transmission System 3. City of Tucson Water Reclaimed Water System 4. Ina Road Reclaimed Water System The seven factors considered for the 4 projects included: 1. Cost 2. Implementation Timeline 3. Control (legal, contractual, and ownership issues) 4. Possible Fatal Flaws 5. Multipurpose Opportunities 6. Recharge Required for Economic Use (scale of delivery, quality) 7. Finance Impacts Mayor Loomis suggested that the Council meet in January or February to address answers to questions asked this evening and to refine the projected numbers. Council Member Bryant suggested meeting as soon as possible after the City of Tucson election. 11/01/99 Minutes, Town Council Study Session 2 Mayor Loomis recessed the study session at 7:15 p.m. Meeting resumed at 7:25 p.m. COMMERCIAL READINESS PROGRAM—PHASE 2 Mr. Hook reviewed the water infrastructure projected for Phase II of the Commercial Readiness Program. Finance Director David Andrews reviewed the financial impact and the financial options available to the Town in order to accomplish this program. Mayor Loomis suggested that this should be brought back to the Council for action early in January. Mayor Loomis suggested that a status report could be distributed between now and January or an additional study session could be held, if needed. A MOTION was made by Council Member Bryant to ADJOURN the study session at 8:30 p.m. MOTION SECONDED by Vice Mayor Johnson. MOTION carried 5 —0. Respectfully submitted, Cr,. Kathryn E. Cuvelier, CMC Town Clerk DRAFT MINUTES ORO VALLEY TOWN COUNCIL REGULAR SESSION NOVEMBER 3, 1999 ORO VALLEY COUNCIL CHAMBERS 11,000 N. LA CANADA DRIVE REGULAR SESSION AT OR AFTER 7:00 PM CALL TO ORDER ROLL CALL PRESENT: Paul Loomis, Mayor Dick Johnson, Vice Mayor Paul Parisi, Council Member Fran LaSala, Council Member Wayne Bryant, Council Member PLEDGE OF ALLEGIANCE Mayor Loomis led the audience in the Pledge of Allegiance. UPCOMING MEETING ANNOUNCEMENTS—TOWN MANAGER Human Resource Director Jeff Grant reviewed the upcoming meetings for the month of November. CALL TO AUDIENCE Jim Kriegh, 40 East Calle Concordia, Oro Valley. He stated the wording in Item B should be changed to read "registered structural engineer or structural engineer" for liability precautions. 1. CONSENT AGENDA At the request of Council Member Bryant, Mayor Loomis removed Items B, D and E from the Consent Agenda for discussion. Mayor Loomis removed Item C for discussion. MOTION: A MOTION was made by Council Member Parisi to approve Item A on the Consent Agenda. Motion SECONDED by Council Member LaSala. Motion passed, 5-0. 11/03/99 Minutes, Council Regular Session 2 A. Resolution No. (R)99-104 Award of contract for Project No. 98/99-09 First Avenue Safety Improvements from CDO Bridge to Tangerine Road Median installation at First Avenue & Frys/Home Depot Driveways and First Ave./Naranja Drive left turn bay installation B. Resolution No. (R)99-105 Requiring that all Public Art Projects in public and private locations be reviewed by an Engineer for structural safety and durability— (PULLED FOR DISCUSSION) C. OV12-97-08 Approval of Substitute Assurance Agreement Vistoso Ridge Subdivision, Lots 39-128 —(PULLED FOR DISCUSSION) D. OV12-98-02B Approval of Stone Canyon Entryway Development Plan, Rancho Vistoso Neighborhood 11 located at the end of Vistoso Highlands Drive, west of Rancho Vistoso Boulevard— (PULLED FOR DISCUSSION) E. Resolution No. (R)99-108 Designating the Election Date and Purpose of Election; Designating the Deadline for Voter Registration; and designating the place and the last date for candidates to file Nomination Papers—(PULLED FOR DISCUSSION) B. RESOLUTION NO. (R) 99-105 REQUIRING THAT ALL PUBLIC ART PROJECTS IN PUBLIC AND PRIVATE LOCATIONS BE REVIEWED BY AN ENGINEER FOR STRUCTURAL SAFETY AND DURABILITY Community Development Director Brent Sinclair explained that not all projects require a structural engineer. He stated that the language format was designed specifically to provide flexibility. He added if a structural engineer was required, the applicant would be required to submit the request along with their report. MOTION: Council Member Bryant moved to ADOPT Resolution No. ( R) 99-105 requiring that public art in public and private places be reviewed by one of the Town's engineers and where deemed appropriate a registered structural engineer to ensure the structural safety and durability of the artwork, as presented in the attached resolution. Motion SECONDED by Council Member LaSala. Motion passed, 5-0. C. OV12-97-08 APPROVAL OF SUBSTITUTE ASSURANCE AGREEMENT VISTOSO RIDGE SUBDIVISION, LOTS 39-128 Mayor Loomis stated the reason he requested this item pulled was to confirm that Council had received the addendum report and to have Mr. Sinclair explain the additional conditions. Mr. Sinclair clarified that these were not new items, but elaboration's of Item#1 addressing the paving of the street. The developer wants to develop the subdivision in two phases and staff has revised the language specifically to note the conditions. MOTION: Vice Mayor Johnson moved to APPROVE OV12-97-8 Vistoso Ridge I Lots 39-128 Substitute Agreement with changes to Exhibit C as noted in the Staff recommendation. Motion SECONDED by Council Member LaSala. Motion passed, 5-0. 11/03/99 Minutes, Council Regular Session 3 D. OV12-98-02B APPROVAL OF STONE CANYON ENTRYWAY DEVELOPMENT PLAN, RANCHO VISTOSO NEIGHBORHOOD 11 LOCATED AT THE END OF VISTOSO HIGHLANDS DRIVE, WEST OF RANCHO VISTOSO BOULEVARD In answer to a question from Council Member Bryant, Mr. Sinclair explained that the downsizing of the pipes would be to accommodate the new paving section. Charles Hulsey, The WLB Group, explained that the drawing reflecting the dimensions was simply mislabeled and that the pipe did not exist. MOTION: Council Member LaSala moved to APPROVE OV 12-98-02B, Stone Canyon Entry Way Development Plan, with conditions listed in Exhibit "A". Motion SECONDED by Council Member Bryant. Motion passed, 5-0. "A" 1. The architecture for the guardhouse shall be submitted for review and approval by the Development Review Board 2. The drainage statement must be revised to reflect the following: • Show the break down of the 1300 square feet entry building area into building, patio, walkway and wall areas. • Remove the 42-inch storm pipe dimension at concentration point 1 E and insert the correct size of 36-inch. 3. The Town of Oro Valley will not accept responsibility for the maintenance of the riprap around the end of the 36-inch storm pipe. E. RESOLUTION NO. (R)99-108 DESIGNATING THE ELECTION DATE AND PURPOSE OF ELECTION; DESIGNATING THE DEADLINE FOR VOTER REGISTRATION; AND DESIGNATING THE PLACE AND THE LAST DATE FOR CANDIDATES TO FILE NOMINATION PAPERS MOTION: Council Member Bryant moved to APPROVE Resolution (R) 99-108, and designating March 14, 2000 as the Primary Election Date and May 16, 2000 as the General Election Date. Motion SECONDED by Council Member LaSala. Motion passed, 5-0. 2. APPROVAL OF GRANT PROPOSAL TO THE ENVIRONMENT PROTECTION AGENCY FOR THE SAVE-A-PLANT PROGRAM Melissa Shaw, Planner II, extended thanks to the volunteers who helped organize the Save-A-Plant project, Karen Rogers and Louise Harrison. Ms. Harrison gave an overview on the following topics: • Outline of the Environmental Protection Agency Grant • The EPA Grant and Save-A-Plant • Details of the Grant Proposal • The Future 11/03/99 Minutes, Council Regular Session 4 Ms. Harrison read the following closing statement: "The Save-A-Plant initiative is already a success and it is exciting that we have an opportunity to secure funds to further develop it. On behalf of all of those involved in the program, we ask for the Mayor and Council Members continuing support by approving the grant proposal for submittal to the EPA's Environmental Education Program. Thank you for your time and the opportunity to make this presentation". Council Member Bryant extended his thanks to Karen and Louise for volunteering their time and effort spent on a very important program. He also thanked Bill Adler for his generous contribution. MOTION: Council Member LaSala moved to APPROVE the grant proposal to the EPA's Environmental Education Grant Program requesting funding to enhance the Save- A-Plant program, including the provision of local in-kind matching funds. He also extended appreciation and thanks to Ms. Rogers and Ms. Harrison for their exceptional volunteer efforts. Motion SECONDED by Council Member Bryant. Discussion: Council Member Parisi concurred with his fellow Council members and said that this was a perfect example of the skill and experience of people residing in the Town of Oro Valley, striving to make this a better community. Mayor Loomis also thanked Ms. Roger and Ms. Harrison and added that a draft of the proposed legislation from Department of Agriculture is expected to be delivered next week. Motion passed, 5-0. 3. RESOLUTION NO. (R)99- 106 MAKING THAT DOCUMENT ENTITLED "THE 1999 AMENDMENTS TO THE TOWN TAX CODE OF THE TOWN OF ORO VALLEY" A PUBLIC DOCUMENT Finance Director David Andrew reviewed the report. He explained that the Arizona League of Cities and Town is coordinating amendments to the local sales tax laws that will reflect the recent changes in state law to make compliance with the tax code easier for businesses. MOTION: Vice Mayor Johnson moved to ADOPT Resolution ( R) 99-106 making that document entitled "The 1999 Amendments to the Town Tax Code of Town of Oro Valley, Arizona" a Public Record. Motion SECONDED by Council Member LaSala. Motion passed, 5-0. 4. PUBLIC HEARING —ORDINANCE NO. (0) 99-57 RELATING TO THE PRIVILEGE LICENSE TAX; ADOPTING "THE 1999 AMENDMENTS TO THE TOWN TAX CODE OF THE TOWN OF ORO VALLEY, ARIZONA" BY REFERENCE; ESTABLISHING AN EFFECTIVE DATE AND PROVIDING PENALTIES FOR VIOLATIONS THEREOF (NO ACTION WILL BE TAKEN— 11/03/99 Minutes, Council Regular Session 5 THIS PUBLIC HEARING IS ANTICIPATED TO BE CONTINUED UNTIL NOVEMBER 17, 1999) Mr. Andrews explained that the amendments of the Town Tax Code have been made a Public Record and that staff respectfuq requests a continuance of the consideration of this item until Council's November 17t Regular Session. In answer to a question from Mayor Loomis, Mr. Andrews explained that the League requires the Town adopt the tax code amendments by December 1st in order to become effective by January 1, 2000. Council Member Bryant stated that the public should have an opportunity to review the document. Mayor Loomis explained that this item would be made available for 14 days. He further explained that it had been recommended that after the Town's approval, the Ordinance does not become effective for 30 days and that the League of Cities and Towns objective was to coordinate all the tax changes throughout the State of Arizona to become effective in the year 2000. Mayor Loomis opened the public hearing. There being no speakers, Mayor Loomis closed the public hearing. MOTION: Vice Mayor Johnson moved to CONTINUE Ordinance No. (0)99-57 "The 1999 Amendments to the Town Tax Code of the Town of Oro Valley, Arizona" to the November 17 Regular Session. Motion SECONDED by Council Member LaSala. Motion passed, 5-0. 5. ACCEPTANCE OF THE SOLID WASTE MANAGEMENT TASK FORCE REPORT AND SUPPLEMENTAL REPORT AND POSSIBLE ACTION REGARDING SOLID WASTE COLLECTION WITHIN THE TOWN OF ORO VALLEY Dick Izen, Chairman of the Task Force, stated there were members of the task force present to give an overview of the need for government intervention, costs, existing contracts and recycling issues. The following members from the Solid Waste Task Force gave the report and spoke in favor of the Supplemental Report and possible action regarding Solid Waste Collection within the Town: Bob Putnam, 11410 North Scioto, Oro Valley Dan Griffen 14054 North Cirrus Hill Drive, Oro Valley Paul Sobel, 14108 North Biltmore Drive, Oro Valley Mark Lewis, 7925-A North Oracle Road, #391, Oro Valley Council Member LaSala asked the following: 11/03/99 Minutes, Council Regular Session 6 • Why does the Town need a"community clean-up day" when it could be developed with a little advertisement • Has anyone investigated the cost for recycling. He stated it would be very expensive for businesses to provide this service at no cost • Had there been any information gathered regarding the environmental laws and liabilities In conclusion, Council Member LaSala stated if none of these issues had been addressed, how could the force possibly expect Council to take action? Mr. Lewis gave the following explanation: (1) The idea was to coordinate a day in which the Town could effectively advertise and communicate to the population as a whole using a mass media approach. (2) The issue of recycling could be something people could do if they chose to do so. (3) The Task Force focused particularly on the environment, doing the right thing, and being a leader in the area of recycling. He added the task force felt there was a need to have a responsible trash provider in the Town, therefore, they did not evaluate this issue from a profit standpoint. He stated if the Council had concerns regarding profit that this could be added to the Request for Proposal (RFP). Council Member LaSala stated that the customer could be charged for the amount of garbage generated to encourage people to recycle. He asked what would be the incentive for recycling. Mr. Lewis explained that regarding the volume that he had contacted six of the markets in which the test studies had been done. Each of the six said that it was their desire to discourage volume, not to encourage volume to save money in both trash and recycling. Council Member LaSala stated that he had been overwhelmed with letters and approached by individuals who were in total opposition to this proposal. Council Member Bryant stated he had also been approached and that the majority of people's concerns were with having too many trucks providing service on different days and the cost. He asked if the Town developed an Ordinance, could the Ordinance regulate the price and standardize the dates. If so, would this impose property taxes on the citizens? Mr. Andrews explained if the Town entered into the trash business, it would not necessarily mean a property tax, but simply a fee for service. Council Member Parisi explained that this task force was assembled because the community felt there was a need for the Town to investigate solid waste collection and suggested accepting the report and moving forward. Vice Mayor Johnson thanked the task force for their participation and suggested that Council accept the proposal; staff review the report; and staff resubmit the report with their recommendations along with a sample RFP, and then move forward. 11/03/99 Minutes, Council Regular Session 7 Council Member LaSala stated the private sector is doing a wonderful job. He said he had a philosophical problem with government intervening in an area when the private sectors are doing just fine. Mayor Loomis stated that he believed the task force had done a super job and had a very good recommendation, but had concerns with overall liability, unknown RFP's; and not providing compensation to the bidders for putting together the proposal. He said the report did identify deficiencies in the Town Ordinance and has identified areas where additional corrections could be made. He added that there should be an organized method for trash collection within the Town of Oro Valley. He stated there were ways to motivate the providers to restrict certain elements and meet some of these deficiencies. MOTION: Mayor Loomis moved to ACCEPT the Solid Waste Management Task Report/Supplemental, thank the task force for their effort, dissolve the Task Force, and the Town staff review the recommendations submitted by the Task Torce and an addendum for recommendations on Ordinance changes and if necessary a plan that would accomplish working with the major contractors and other recommendations that staff deems necessary. Motion SECONDED by Council Member LaSala. Discussion: Vice Mayor Johnson stated that he would like to include in the motion "to start some preliminary action on the RFP". Mayor Loomis stated that the Town force had provided a draft RFP and proposal. He stated that he did not believe Council needed to go any further with the RFP and did not accept Vice Mayor Johnson's request to amend the motion. CALL FOR QUESTION MOTION: Council Member LaSala requested a call for the question. Call for the question passed, 4/1, with Council Member Bryant opposed. Motion passed, 5-0. Mayor Loomis called a recess at 8:22 p.m. Meeting back in session at 8:34 p.m. 6. RESOLUTION NO. (R)99-107 DECLARING THAT CERTAIN DOCUMENT KNOWN AS "ORO VALLEY CENTER, PARCEL D SIGN GUIDELINES" A PUBLIC DOCUMENT MOTION: Council Member LaSala moved to APPROVE Resolution No. (R) 99-107 making that document known as Ordinance (0) 99-5 8 "Oro Valley Center, Parcel D Sign Guidelines", a public record. Motion SECONDED by Council Member Bryant. Council Member Parisi stated that he had been striving for years to have one sign code for the entire town because of the restriction involved and suggested adopting an Ordinance that would adopt a universal sign code package. 11/03/99 Minutes, Council Regular Session 8 Mayor Loomis explained that it may not be legitimate to make a motion of this nature at this time, and that they were simply making this particular item a public record for Parcel D. He further explained that there would be a public hearing scheduled for the next Council meeting to discuss the issues and recommendations. Motion passed, 5-0. 7. DRAWING TO CHOOSE A LUCKY WINNER FROM A POOL OF ENVIRONMENTAL SENSITIVE LANDS ORDINANCE SURVEYS Mr. Sinclair stated that at a future Council meeting there would be a formal presentation on what the survey results actually were and a further presentation of the vision statement of the Environmental Sensitive Land Ordinance (ESLO). He also gave recognition to Richard Underwood for donating the grand prize of a 24 inch boxed tree. Mayor Loomis and Mr. Underwood announced the lucky winners. David and Joan Fucett 17111 Sunset Avenue, Shakopee, Minnesota 55379-9151 8. OV 12-98-22 STONE CANYON II FINAL PLAT, COMMON AREAS A & B, RANCHO VISTOSO NEIGHBORHOOD 11 LOCATED IN THE NORTHWEST CORNER OF THE RANCHO VISTOSO PAD, NORTH AND WEST OF THE GOLF CLUB AT VISTOSO Mr. Sinclair explained that staff is recommending approval of the final plat with the conditions that are attached in Exhibit"A". He explained that the purpose of the Addendum Report for Exhibit "A" was to address some of the items discussed in the staff report that were requirements but had been omitted. He added the items in Addendum Exhibit"A" addresses any changes that the improvement plans may have and any effects on the final plat. Mr. Sinclair added that Council previously directed staff to look at the provision or condition of a trailhead access for the final plat, which was passed to the applicant. The applicant has presented some alternatives for the trailhead access. He stated that staff recommend that the viewing the trailhead access as a separate issue from the final plat, and not impose any of the trailhead conditions at this time. In answer to a question from Council Member Bryant, Mr. Sinclair clarified that the four items on the addendum could be added to the existing numbering system. In answer to a question from Council Member LaSala, Town Attorney Dan Dudley explained that to view the trailhead as a condition for the final plat would be inappropriate and impermissible under Arizona State Law. Mayor Loomis opened the floor for comments. Bill Adler, 10720 North Eagle Eye, Oro Valley. He stated that he had concerns with the setbacks and with the elevated lots which would affect the scenic and aesthetic value of the property. 11/03/99 Minutes, Council Regular Session 9 Jan Johnson, 3 885 East Golder Ranch Road, President of Pima Trails Association. She expressed her concern and stated that the development definitely needed the trailhead included in the plan. She stated that this could provide access to the Tortolita Mountain Park. She added that she would like to see this item continued until the trailhead issue is addressed. Carl Boswell, 11700 North Joi Drive, had the following concerns: • Having such short notice on an issue that would have ramifications in the future • The Town was unable to protect this extremely rare site. • The developer who refused to consider a trail through the property and to substitute Honey Bee Canyon for the trail In conclusion Mr. Boswell said that"the words that come to mind for this apparent contradiction in approach were disingenuous, patronizing and selfishness". Patty Estes, 11700 North Joi Drive. She explained that Jan Johnson gave a very good synopsis regarding the issues and added that if Council approved the final plat in it's current form, the Town would be turning their back on Tortolita Mountain Park. Hector Conde, 14040 West Lobelia, expressed his concerns and stated that this plan should be denied. Richard Underwood, 10945 North Pomegranate, said that there should be a way of working these issues out and create an access that will work for everyone. Charlies Hulsey, The WLB Group stated that the group had objections to a couple of the items in the condition and that they were relatively minor. Mr. Hulsey explained that in regards to Item 1, that a portions of the conservation easements includes an area where the developer intends to enhance the vegetation for the wildlife corridor along No Name Wash. Staff has informed WLB that there would not be a problem deleting the requirements and allowing the group to grade with the approval and review from staff In regards to Item 2, Mr. Hulsey explained that after collaborating with staff, it was difficult to determine how to record the open space area as an individual lot. In answer to a question from Mayor Loomis, Mr. Hulsey explained that the conservation easements, flood plans and common area are already recorded as part of the plat. He explained the only thing that they had difficulty in defining on the plat, was how much open space there was. In answer to a question from Mayor Loomis, Mr. Sinclair clarified that conversation takes place on a constant basis and he was not suggesting any changes be made to the conditions. However, the suggestion that there would some disturbance in vegetation for some of the bank protection for the conservation easements has been well noted. He added that with regards to the building envelope being recorded, he did not have any alternatives. 11/03/99 Minutes, Council Regular Session 10 Mayor Loomis clarified that the majority of the work and layout of the property was done in the preliminary planning process. He added that, with regards to the trail and trailhead, the proposed area identified for the trailhead was not identified on the plat and that the trailhead should be shown. He explained that this was a subdivision plat and not a rezoning nor an amendment to the PAD. Mr. Hulsey stated that he was trying to make contact with Pima County Parks and Recreation to elaborate about developing another location for the trail. MOTION: Council Member Parisi moved to APPROVE OV 12-98-22 Stone Canyon II, Rancho Vistoso Neghborhood 11 Final Plat, effective on the date of satisfaction of attached conditions listed in with both Exhibit A number sequentially 1-15, attached herewith. Motion SECONDED by Council Member LaSala. Exhibit"A" 1 The following general notes must be added to the final plat: • All buyers of lots with conservation easements of other No-Build Areas shall be informed of such easements of areas. Buyers will acknowledge receipt of these information items by signing acknowledgement forms provided and maintained by the developer • All riparian areas shall be fenced off and protected from disturbance during construction, in accordance with the Riparian Habitat Ordinance. • No construction, clearing of vegetation, ground disturbance and alteration of topography regardless of amount, shall take place on recorded conservation easements 2. General Note 29 shall be revised to read, "Grading shall be limited to 20,000 square feet for house pads and accessory uses; otherwise grading shall be limited to roadways, driveways, and utility installation. Areas outside the building envelope shall be recorded as permanent open space. The building envelope shall be staked and then inspected by the Senior Zoning Inspector prior to grading." 3. Lots 134 and 136 must be platted within the Town of Oro Valley jurisdiction or show it as not a part of this plat. 4. The building envelopes for Lots 232-234 shall be shown the plat and located as close to the front property line as possible 5. The conservation easement symbol must be added to the legend on sheet 2 of the final plat. 6. The plat shall provide the property presentation of locations maps (4-405C.1), title blocks (4-5D.1), section covers (4-405G.2a), and property lines (4-405H.4). 7. Label the section lines on sheets 3 of14, 8 of 14 and 9 of 14. 8. The line type that represents the riparian area on the legend does not match what is on the plat. 9. Include the line type for the section lines on the legend 10. The title report does not include the land shown on this final plat, provide the correct title report. 11. Add dimension arrows to all exterior boundary lines to clarify their beginning and end. 12. The wash crossings for Tortolita Mountain Drive must be designed to be wildlife 11/03/99 Minutes, Council Regular Session 11 friendly, and must be submitted for the Planning and Zoning Administrator's approval. 13. If necessary, based on the revised drainage report, delineate any changes to the floodplain and submit a CLOMR and LOMR 14. All drainage maintenance easements on private lots shall be delineated on the Final Plat 15. The above-mentioned conditions and the conditions in the first Stone Canyon II Final Plat Town Council report (OV12-98-22) must be addressed and resolved prior to the recordation of the Final Plat Dicussion: Council Member Parisi stated that staff has reviewed the plan and has worked with the developer. This was going to be a very good project and should be posted. Counicl Member Bryant expressed his concerns over the Honey Bee Canyon and the walk-a-line. He stated the applicant had not made a proposal as to how these policies would be addressed and how the trail would be installed, therefore, he has a hard time addressing this item in a positive manner. Motion passed, 4-1, Council Member Bryant opposed. TOWN MANAGER'S REPORT No report. ENGINEER'S REPORT No report. FINANCE DIRECTOR'S REPORT No report. COMMUNITY DEVELOPMENT DIRECTOR'S REPORT No report POLICE CHIEF'S REPORT Lieutenant Charlie Lentner said the Halloween festivities were very popular and well received. WATER UTILITY DIRECTOR'S REPORT Water Utility Director David Hook distributed to Council a copy of the 1998 Water Quality Report. He also reported that there had been a well failure in the OV1 area. He explained that staff had requested emergency procurement and it is anticipated to cost about $20,000. 11/03/99 Minutes, Council Regular Session 12 COUNCIL COMMITTEE REPORTS Vice Mayor Johnson stated that he would be reviewing the library facility in Sierra Vista constructed by one of the architects interviewed. He added there would be a presentation to Council by next week. Council Member Paul Parisi stated that the Police Department was doing a great job with the mobile command post. He stated that next week the interviewing process for the Police Chief would begin. He added that he would also be meeting with the Fire Advisory Committee on November 15th to review the plans for the Town's fire emergency services. Council Member LaSala announced that there would be a Chili Cook-off in downtown Tucson on Friday, November 5th and that all monies would be donated to charity. Council Member Bryant announced that the Chief of Police interview process would begin on Tuesday and Wednesday with a reception on Tuesday night. Mayor Loomis announced that last week was the Oro Valley Jazz Festival and it was very successful. He congratulated the Parks and Recreation Department for doing a fine job. CALL TO AUDIENCE No speakers. ADJOURNMENT MOTION: Council Member LaSala moved to ADJOURN the meeting at 9:45 p.m. Motion SECONDED by Vice Mayor Johnson. Motion passed, 5-0. Respectfully submitted 41110 Linea Hersha, Administrative Secretary B COUNCIL COMMUNICATION TOWN OF ORO VALLEY MEETING DATE: November 17, 1999 TO: HONORABLE MAYOR& COUNCIL FROM: David L. Andrews, Finance Director _ SUBJECT: Consideration and Approval of Budget and Bond Committee Recommendation to Allow for Staggering Terms of Committee Members SUMMARY: The procedures of the Budget and Bond Committee state that member appointments shall be for a period of two years and that appointments shall be staggered such that the terms of no more than three members expire in one year. Due to an oversight by staff, the original Council appointments did not specify which of the five appointments would be for one year and those which would be for two years. The Budget and Bond Committee addressed the issue at its October 25 meeting and unanimously agreed to recommend that Council designate the terms of Mr. Barton Rochman and Mr. Jack Longley as one year terms. This recommendation was developed by a random selection process. The motion you have before you would approve the Committee's recommendation. ATTACHMENTS: N/A RECOMMENDATION: Staff recommends approval of the Budget and Bond Committee recommendation. SUGGESTED MOTION: I move to designate the terms of Budget and Bond Committee members Barton Rochman and Jack Longley as one year terms, to expire June 30, 2000. or I move to . . . David L. Andrews Finance Directo my I lAfif....idfir Chuck Sweet Town Manager • TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: NOVEMBER 17, 1999 TO: HONORABLE MAYOR& COUNCIL FROM: Shirley Gay,Assurance Clerk SUBJECT: OV12-97-17B COPPER RIDGE II,AMENDMENT OF ASSURANCE AGREEMENT SUMMARY: Insight Investment Company has requested an extension of six months as improvements will not be completed before � Y q time frames required. RECOMMENDATIONS: Staff supports this request, as it will ensure that proper assurances are in place until the project is complete. SUGGESTED MOTION: The Town Council may wish to consider the following motion: I move to approve OV 12-97-17B amendment of assurance agreement for six months from the original expirat i_)n date of April 1, 2000. Extended expiration date - October 1, 2000. ATTACHMENTS: Amendment of Assurance Agreement r' Lik Plan :. .nd Zonin' Administrator 0 • ' op C s nity Dev•opment Directo Ai4../,' itr ......41: Town Managler F:\individ\sag\assur\tccrel • • Subdivision COPPER RIDGE II Lots 13-15 , 17-36 & 38-46 OV 12-97-17B TOWN OF ORO VALLEY AMENDMENT OF ASSURANCE AGREEMENT FOR COMPLETION OF SUBDIVISION IMPROVEMENTS THIS AMENDED AGREEMENT made and entered into this day of _ , 19 99 , between INSIGHT INVESTMENT COMPANY an Arizona corporation as Beneficiary under Trust No. 4794 (referred to in this Agreement as "Subdivider") ; FIRST AMERICAN TITLE IIJSURANCE COMPANY, a California corporation As Trustee under Trust No. 4794 (referred to in this Agreement as "Trustee") and Town of Oro Valley, Arizona, (referred to in this Agreement as "Town") . WHEREAS, the parties have entered into an Assurance Agreement dated September 22 , , 1999 , recorded in Docket 11151 at Page(s) 16 2 3-16 31 in the office of the Pima County Recorder and, WHEREAS, conclusion of improvements is not possible within the time stated in that agreement due to the following circumstances: improvements will not be completed before time frames based on recordation of the plat expire ; Expiration due to delay in recordation of plat . and WHEREAS, the parties desire to extend the time for completion; THE PARTIES agree as follows: 1. That based upon the above specified conditions good cause for extending the assurances has been demonstrated. (2 . Note: Complete depending upon which circumstances are applicable to the request: ] [a. THE time for completion stated in Section 2 . 07 of the agreement described above shall be extended to October 1, 2000. ► _• ] , JA.T: PURSUANT to the Oro Valley Town Zoning Code the parties are requesting substitution of assurances to the following parties, who are the property owners tI � ; ] TOWN OF ORO VALLEY, ARIZONA Mayor ATTEST: TRUSTEE: FIRST AM RICAN TITLE Town Clerk INSURANCE COu ' .•,, a California corpor. .n• -r Trust No. 4794 as Tr tee .' a.• not otherwise APPROVED AS TO FORM: by: . B ! STATE OF ARIZONA ) ) ss . County of Pima ) On October 26 , 1999 , before me, the undersigned Notary Public, personally appeared Michael H. Jones, personally known to me (or proven to me on the basis of satisfactory evidence) to be the person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity (ies) , and that by his/her/their signature (s) on the instrument the person (s) or the entity upon behalf of which the person (s) acted, executed the instrument . // ' , -) WITNESS my hand and official seal . ( lU j ,1 - � fir, MyCommission Expires : -„tt�to i "Lit 12/27/2000 c .a.. t171 ii. :..7-.-:-7-- --„ "L-- ' .1'1', ''''"- rl L. ty t �; NotJ,Ni +attic, A z.o:la , `0 _, +' '?•i f.: i..l l 1. S,V f -y '1 ,� , , /z►.'02 fl) STATE OF ARIZONA ) -, •• =`� ) ss . L--,,,,...;--,- County of Pima ) On October 28 , 1999 , before me, the undersigned Notary Public, personally appeared Brigitte Echave , personally known to me (or proven to me on the basis of satisfactory evidence) to be the person (s) whose name (s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies) , and that by his/her/their signature (s) on the instrument the person (s) or the entity upon behalf of which the person (s) acted, executed the instrument . / ' m WITNESS my hand and official seal . i/ 0 : i (1 /II My Commission Expires : (J1; LiC)/(1 12/27/2000 Nota y Public /:':::$::,.1., "OFFICIAL SEAL' L' - Cindy A. Reiche i ..R �-" _ Notary rutblic-Arizona CountyPirlla f y i_• .err s TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: November 17, 1999 TO: HONORABLE MAYOR & COUNCIL FROM: Dennis Silva, Jr., Planner I SUBJECT: OV12-99-17 PUSCH RIDGE DAYCARE/OFFICE COMPLEX DEVELOPMENT PLAN LOCATED ALONG ORACLE ROAD AND SURROUNDED ON THE OTHER THREE SIDES BY THE ROCK RIDGE APARTMENTS BACKGROUND: Entranco, representing the owner/developer, Lakke Investment, request Town Council approval for a development plan. The subject parcel is 2.57 acres with a 27,145 square foot building envelope. Located along Oracle Road and surrounded on the other three sides by the Rock Ridge Apartments. The zoning for this property is C-1 and allows professional offices. The Town Council approved the Conditional Use Permit (CUP) for the day care use on March 3, 1999. SUMMARY: The proposed day care center will consist of an 8,850 square foot building with a play yard. This building will be connected by a shade trellis to the proposed office building which will be 18,295 square feet. The day care center will be a single story structure and the office building will be a combination of single and two stories. There are 101 parking spaces and 4 handicapped spaces provided for this development plan, which complies with the Oro Valley Zoning Code Revised (OVZCR). The Class I bicycle parking spaces will be located on the north side of the proposed office building. The Class II bicycle parking spaces will be located on the east side of the day care center. The floor area ratio (FAR) for this project is .24, which complies with the FAR for the C-1 zoning district (.25). The public art display will be located at the front of the building (refer to Exhibit "A" for the public art condition). Per the DRB condition, an archaeological clearance report has been prepared by Old Pueblo Archaeology Center. There were no cultural materials found on-site, thus there is no obligation for additional cultural resource studies. GENERAL PLAN COMPLIANCE: Providing more commercial enterprises in Oro Valley coincides with the goals of the economic development section of the General Plan. Policy 3.1J encourages employment-related uses to provide work places for a growing employment base. TRAFFIC: This project is located on the norhtwest corner of Oracle Road and Rock Ridge Drive. Access to the site will be provided by a new driveway on to Rock Ridge Drive, located approximately 180 feet west of the centerline of Oracle Road. The average weekday trips generated will be 1,140. Peak hour trip generation will be 171 in the morning peak hour and 194 in the evening peak hour. TOWN OF ORO VALLEY COUNCIL COMMUNICATION Page 2 of 3 Capacity analyses were evaluated and the only movement of concern is the morning northbound left turn from Oracle Road on to Rock Ridge Drive. Presently,the level of service is rated at E. This means that vehicles will experience delays between 30 and 45 seconds. At full buildout the level of service will drop to an F. Delays of 45 seconds of or more will be common. However,the existing left turn pocket on Oracle Road is long enough, 150- feet,to accommodate the expected four car queue per a 2 minute period in the peak hour. All other levels of movements will operate at level of service C or better. A condition of approval that the Development Review Board required was for the Town Staff to work with the developer to provide for a traffic management plan because of the Board's concern with safety for drop-off and pick up of children at the day care center. The developer,project architect and staff met on October 22, 1999 and have agreed on the traffic control plan attached to this report. DRAINAGE: This site is not in a balanced or a critical basin. The project engineer has proposed to provide retention for the five-year event. The volume of retention required is 5,318 cubic feet and the amount proposed to be provided 5,582 cubic feet. Percolation test were conducted for the on site soils and based on the tests the maximum time it will take for the largest basin to drain will be six hours. This is half of the 12 hours as specified by Pima County Flood Control District. All excess run off from the will continue to drain to the existing 30-inch storm sewer near the southwest corner of the site. The project engineer has determined that there is adequate capacity to accommodate these flows. GRADING: This site will be mass graded. No grading waiver is expected. RECOMMENDATION: Staff recommends approval of the proposed Development Plan for the Pusch Ridge Day Care/Office Complex, subject to the conditions listed in Exhibit"A". DEVELOPMENT REVIEW BOARD ACTION: This item was recommended for approval by a 4—0 vote on October 12, 1999. SUGGESTED MOTION: The Council may wish to consider one of the following motions: I move to approve OV 12-99-17 Pusch Ridge Day Care/Office Complex Development Plan, effective on the date of satisfaction of attached conditions listed in Exhibit A, attached herewith. OR TOWN OF ORO VALLEY COUNCIL COMMUNICATION Page 3 of 3 I move to approve OV 12-99-17 Pusch Ridge Day Care/Office Complex Development Plan, effective on the date of satisfaction of attached conditions listed in Exhibit A, attached herewith and the following added conditions: OR I move to deny OV 12-99-17 Pusch Ridge Day Care/Office Complex Development Plan, finding that: ATTACHMENTS: 1. Exhibit "A" - Conditions for Approval 2. Reduced Copy of the Development Plan 3. Reduced Copy of the Traffic Control Plan Planni •" o Zoning Administrator Community Development Director •wn Manager F:\ov\ov12\1999\0V12-99-17\DPTCRPT.doc EXHIBIT "A" TOWN COUNCIL CONDITIONS FOR APPROVAL OV12-99-17 PUSCH RIDGE DAY CARE/OFFICE COMPLEX DEVELOPMENT PLAN 1. ADOT must review and comment on the traffic impact report. Any mitigating measures required from ADOT's review must be addressed in the improvement plan review phase. No grading permits will be issued for this site until written communication from ADOT regarding the above has been received by the Planning and Zoning staff. 2. "OV 12-99-17" must be listed on the bottom right corner of each sheet. 3. 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O vi..) -:,.....,: n • s 'c1�]!h 'Y hy • :eQ +r - ,d, + : k%Kn ti_ZOETDG TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: November 17, 1999 TO: HONORABLE MAYOR& COUNCIL FROM: Dennis Silva, Jr., Planner I SUBJECT: OV12-99-17 PUSCH RIDGE DAYCARE/OFFICE COMPLEX LANDSCAPE PLAN LOCATED ALONG ORACLE ROAD AND SURROUNDED ON THE OTHER THREE SIDES BY THE ROCK RIDGE APARTMENTS BACKGROUND: DRE & Associates, representing the owner/developer, Lakke Investment, request Town Council approval for a landscape plan. The subject parcel is 2.57 acres with a 27,145 square foot building envelope. Located along Oracle Road and surrounded on the other three sides by the Rock Ridge Apartments. The zoning for this property is C-1 and allows professional offices. The Town Council approved the Conditional Use Permit (CUP) for the day care use on March 3, 1999. SUMMARY: The seed mix design complies with the Oro Valley approved revegetation seed mix list. Proposed trees for this development include, Blue Palo Verde, Velvet Mesquite, California Pepper, Whitehorn Acacia, Texas Ebony, Chinese Pistache, and Sonoran Palo Verde. The quantities of all vegetation must be listed on the Tentative Planting Schedule list. The zoning surrounding and adjacent to the subject parcel is C-1. Buffer yards are not required between adjacent parcels of the same zoning designation. However, there is a 25 foot wide buffer yard behind the office building buffering it from the existing apartment complex. The west side of the development will have a 5 foot buffer yard with a 6 foot high masonry and wrought iron wall. The northwest side of the development will have an 8 foot wide buffer yard with a 6 foot high masonry and wrought iron wall. A portion of the subject parcel is located along Oracle Road. There is a 30 foot wide buffer yard along this portion of the proposed development. The Town Engineer approved the landscape buffer yard in the right-of- way (ROW), but the applicant needs a permit from ADOT in order to place the buffer yard in this ROW along Oracle Road. ADOT review is underway. The applicant contacted ADOT and the buffer yard has been conceptually approved. Amenity landscaping for this project includes a courtyard at the center of the office building, an active water play feature and a playground with fabric canopy ranging from 7 to 24 feet high at the daycare, and a fountain in between the daycare and office building. Thirty-nine (39) 24-inch box trees have been designated on the landscape plan, which complies with Section 14-205C.8 of the OVZCR. GENERAL PLAN COMPLIANCE: The proposed landscape plan complies with Policy 9.1H ensuring that landscape improvements mitigate negative visual impacts of buildings and parking lots. This is accomplished by having buffer yards around the buildings and at the parking lot area fronting Oracle Road. TOWN OF ORO VALLEY COUNCIL COMMUNICATION Page 2 of 3 RECOMMENDATION: Staff recommends approval of the proposed Landscape Plan for the Pusch Ridge Day Care/Office Complex, subject to the condition listed in Exhibit"A". DEVELOPMENT REVIEW BOARD ACTION: This item was recommended for approval by a 4—0 vote on October 12, 1999. SUGGESTED MOTION: The Council may wish to consider one of the following motions: I move to approve OV12-99-17 Pusch Ridge Day Care/Office Complex Landscape Plan, effective on the date of satisfaction of attached condition listed in Exhibit A, attached herewith. OR I move to approve OV 12-99-17 Pusch Ridge Day Care/Office Complex Landscape Plan, effective on the date of satisfaction of attached condition listed in Exhibit A, attached herewith and the following added conditions: _ OR I move to deny OV 12-99-17 Pusch Ridge Day Care/Office Complex Landscape Plan, finding that: ATTACHMENTS: 1. Exhibit "A" - Conditions for Approval 2. Reduced Copy of the Landscape Plan PlanninMIT"Zoning Administrator / "q, Community Develo h ent Director Town Manager F:\ov\ovi2\1999\0V12-99-17\LPTCRPT.doc EXHIBIT "A" TOWN COUNCIL CONDITIONS FOR APPROVAL OV12-99-17 PUSCH RIDGE DAY CARE/OFFICE COMPLEX LANDSCAPE PLAN 1. The quantities of all vegetation must be listed on the Tentative Planting Schedule list. 2. Letter from ADOT approving the landscape buffer yard in the right-of-way. 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S ,--- ‘ LLI 41(c.'_,,O..,4, - : itt ,,E . . - .ep '-47 9 - ' ISIOSSI i '' NZ l',' / • .- r ooh ..,--- (\ //N. 19 a i E_ , tp, ; IR . ,, 1 ii• Pl- 6 ' • Y 1 3 3 > Q } i w 6 - I `,7 ;51 g ! rj v c� �4 io - PES ‘k'F6 N . - §1cc iil . 1 X F F TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: November 17, 1999 TO: HONORABLE MAYOR& COUNCIL FROM: Lory Warren, Street Superintendent SUBJECT: Resolution No. (R)99-109 Approving the purchase of a new Motor Grader And amending the Highway Fund Budget for fiscal year 1999-2000. SUMMARY: The Department of Public Works wishes to purchase a new Caterpillar 140H Motor Grader from Empire Machinery of Tucson. This was programmed as a replacement in this year's CIP. The Town of Oro Valley has the option of utilizing the contract awarded to Empire Machinery from the competitive bidding process of Pima County Department of Transportation. This gives the Town of Oro Valley the monetary benefit of purchasing the motor grader at a cost that includes a discount for multiple grader purchases and the "Price Protection Plan" that expired November 1, 1999. Industry standards indicate an estimated 3% increase after that date. The savings on the price protection plan alone are $5,207.13. To purchase the grader by cash in lieu of a lease to purchase option will save an additional $10,631.77 in interest over three (3) years, or $21,675.00 in interest over five (5) years of financing. Empire Machinery of Tucson is crediting the Town of Oro Valley with $7,500.00 for a trade-in of a John Deere 570A Motor Grader. The maintenance cost of our existing grader makes it unreasonable to retain. The new motor grader comes equipped with a transmission guard, ripper with five (5) shanks, blade lift accumulators, windows lower openings and wiper/washer on rear cab. The selling price (less trade-in) is $166,071.00. FISCAL IMPACT: Staff is requesting a modification to the Town's Highway Fund budget to reflect the total cash outlay of$166,071.00 for the purchase of the motor grader. The budget was developed to include $40,000.00 as a lease purchase. Town investments are currently earning approximately 5.58%. The quoted interest rates for lease purchases range from 5.80%to 6.25% . The total cash outlay for the acquisition was omitted from the budget. Approval of the motion to amend the budget would result in the following change to the Highway Fund budget: Machine&Equipment $126,071 Highway Fund Contingency ($126,071) Net impact to Expenditure Limit $ 0 RECOMMENDATIONS: Staff recommends the purchase of this equipment. Staff further recommends a cash acquisition of the equipment in lieu of a lease purchase. SUGGESTED MOTION: The Town Council may wish to consider one of the following motions: I move to approve Resolution(R)99-109 and amend the Highway Fund budget for FY 1999/2000 Or I move to deny Resolution(R)99- 109 and amend the Highway Fund Budget for FY 1999/2000 ATTACHMENTS: Resolution(R)99-109 1,) William Jansen, P.E., Engineer ,YXJ Chuck Sw�•'�Town Manager RESOLUTION NO. (R)99-109 A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA, APPROVING THE PURCHASE OF A NEW MOTOR GRADER AND AMENDING THE HIGHWAY FUND BUDGET FOR FISCAL YEAR 1999/2000. WHEREAS, the Town of Oro Valley Department of Public Works has programmed the purchase of a Motor Grader in this year's CIP budget; and WHEREAS, the present Motor Grader is in need of major repairs; and VVI-EREAS, an opportunity exists to utilize an existing competitive bidding process of Pima County Department of Transportation that presents a substantial savings over initiating another procurement procedure; and WHEREAS, the FY budget 1999/2000 be amended to reflect the cash acquisition of the Motor Grader. THEREFORE, BE IT RESOLVED, BY THE MAYOR AND THE TOWN COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA: 1. That a 1998 Caterpillar 140H Motor Grader be purchased from Empire Machinery of Tucson for $166,071.00 plus a $7,500.00 trade-in allowance for the old Motor Grader. 2. That the Highway Fund budget for fiscal year 1999/2000 be amended to result in the following changes: Machinery & Equipment $126,071 Highway Contingency Fund ($126,071) Net impact to Expenditure Limit $ 0 PASSED AND ADOPTED by the Mayor and Town Council of the Town of Oro Valley, Arizona this 17 tklay of November , 1999. TOWN OF ORO VALLEY, ARIZONA Paul H. Loomis, Mayor ATTEST: APPROVED AS TO FORM: Kathryn E. Cuvelier, Town Clerk Dan L. Dudley, Town Attorney Date Date a TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: November 17, 1999 TO: HONORABLE MAYOR& COUNCIL FROM: David G. Hook,P.E. Water Utility Director SUBJECT: RESOLUTION No. (R)99-110 A RESOLUTION OF THE TOWN OF ORO VALLEY, PIMA COUNTY, ARIZONA APPROVING AND AUTHORIZING AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE CENTRAL ARIZONA WATER DISTRICT AND THE TOWN OF ORO VALLEY PROVIDING FOR DELIVERY OF CENTRAL ARIZONA PROJECT INCENTIVE RECHARGE WATER SUMMARY: On March 14, 1997 Mayor & Council approved an intergovernmental agreement between the Central Arizona Water Conservation District (CAWCD) and the Town of Oro Valley providing for the delivery of Central Arizona Project Incenrive Recharge Water. Since the agreement is to terminate on December 31, 1999 the CAWCD has requested that the Town of Oro Valley renew the IGA for another 4 years until December 31, 2003. "Incenrive Recharge Water" is defined as specially priced Excess Water made available by CAWCD to M&I subcontractors on an annual basis for recharge purposes only. Groundwater savings are considered a form of recharge. The Central Arizona Water Conservation District (CAWCD) was established in 1971 as the state agency to contract for repayment to the federal government of the construction costs of the Central Arizona Project (CAP). As such, the primary mission of the CAWCD is to distribute (sell) Colorado River water transported through the CAP canal by entering into various subcontracts with agriculture, mining and Municipal - Industrial users. Municipal-Industrial users include domestic water providers such as the Town of Oro Valley. The Town of Oro Valley has an allocation of 2294 acre-feet of CAP water. As are all owners of a CAP allocation, the Town is obligated to pay a capital charge to the CAWCD, currently set at $48.00 per acre-foot per year. The CAWCD has approved an incentive water delivery charge of $44.00 per acre-foot for calendar year 2000. Comparatively, the current normal price for CAP water is $54.00 per acre-foot. Total current cost for capital and delivery charges for incentive water is $44 + 48, or $92. The CAWCD reviews and sets the rate schedule for CAP water annually. Increases are expected over the next five years, perhaps by as much as $25/AF. The purpose of taking advantage of incentive priced water at this time using a ground water savings program is the accrual of Long Term Storage Credits. Accrual of storage credits, now,will in the long term, save the Town money and will assist the Town in remaining in compliance with the Assured Water Supply rules. ATTACHMENTS: 1. Resolution No. (R)99- 110 2. Central Arizona Project Incentive Recharge Contract 3. CAWCD Letter dated September 14, 1999 - Brenneman TOWN OF ORO VALLEY COUNCIL COMMUNICATION Page 2 of 2 FISCAL IMPACT: Purchase of CAP water under the incentive program and putting the water in storage (Groundwater Savings) now will cost of$44.00 per acre foot plus the capital cost of$48.00 an acre foot (total $92.00). In addition, by using this incentive water on agriculture farm land as contemplated in the contract with Kai Farms, the Town receives payment of $5.00 per acre foot, reducing the Town's cost to $87.00. The FY99/00 Budget included funding for these expenses. RECOMMENDATION: Staff respectfully recommends that the Mayor& Council approve Resolution No. (R)99- 110 . SUGGESTED MOTION: The Town Council may wish to consider one of the following motions: I move to approve Resolution No. (R)99-110, approving and authorizing an Intergovernmental Agreement between the Central Arizona Water Conservation District and Town of Oro Valley providing for delivery of Central Arizona Project Incentive Recharge Water. Or I move not to approve Resolution No. (R)99-Li.Q. Or I move to ‘%t:/tilityD• ector _ . Town Manager RESOLUTION NO. (R) 99-110 A RESOLUTION OF THE TOWN OF ORO VALLEY, PIMA COUNTY, ARIZONA APPROVING AND AUTHORIZING AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE CENTRAL ARIZONA WATER CONSERVATION DISTRICT AND THE TOWN OF ORO VALLEY PROVIDING FOR DELIVERY OF CENTRAL ARIZONA PROJECT INCENTIVE RECHARGE WATER WHEREAS, the Town of Oro Valley has the requisite statutory authority to acquire, own, and maintain a water utility for the benefit of the landowners within and without the Town's corporate boundaries pursuant to the provision of Arizona Revised Statute 48-571 et.seq.; and WHEREAS, the Town of Oro Valley has the authority to enter into contractual arrangements with other governmental agencies in order to provide services to its residents and customers; and WHEREAS, the Town of Oro Valley has been involved in ongoing efforts to pursue various possible uses for renewable water supplies including artificial and natural recharge and groundwater savings projects;and NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND TOWN COUNCIL OF THE TOWN OF ORO VALLEY,ARIZONA AS FOLLOWS: 1. That the agreement (including all exhibits and communication mentioned or implied therein) between the Central Arizona Water Conservation District and the Town of Oro Valley providing for the delivery and terms of Central Arizona Project Incentive Recharge Water is hereby approved. 2. That the Mayor of the Town of Oro Valley and other administrative officials are hereby authorized to take such steps as are necessary to execute and implement said agreement. PASSED AND ADOPTED by the Mayor and Council of the Town of Oro Valley, Pima County,Arizona this 17th day of November , 1999. TOWN OF ORO VALLEY,ARIZONA Mayor Paul H. Loomis ATTEST: APPROVED AS TO FORM: Kathy Cuvelier, Town Clerk Dan Dudley, Town Attorney Incentive Recharge Contract [9/14/99] 1 2 AGREEMENT BETWEEN THE CENTRAL ARIZONA WATER CONSERVATION DISTRICT AND TOWN OF ORO VALLEY 3 PROVIDING FOR THE DELIVERY OF CENTRAL ARIZONA PROJECT INCENTIVE RECHARGE WATER 4 5 Preamble 6 7 1 . THIS AGREEMENT, made this day of , 8 1999, in pursuance generally of the Act of June 17, 1902 (32 Stat . 9 388) , and acts amendatory thereof or supplementary thereto, including 10 but not limited to the Boulder Canyon Project Act of December 21, 1928 11 (45 Stat . 1057 , as amended, the Reclamation Project Act of August 4, 12 1939 (53 Stat . 1187) , as amended, the Reclamation Reform Act of 13 October 12, 1982 (96 Stat. 1263) , and particularly the Colorado River 14 Basin Project Act of September 30, 1968 (82 Stat . 885) , as amended 15 (the "Basin Project Act") , between the CENTRAL ARIZONA WATER 16 CONSERVATION DISTRICT ("CAWCD") and the TOWN OF ORO VALLEY 17 ("Contractor") ; 18 WITNESSETH, THAT: 19 Explanatory Recitals 20 2 . WHEREAS, the Basin Project Act provides, among other things, 21 that for the purposes of furnishing irrigation and municipal and 22 industrial ("M&I" ) water supplies to water deficient areas of Arizona 23 and western New Mexico through direct diversion or exchange of water, 24 control of floods, conservation and development of fish and wildlife 25 resources, enhancement of recreation opportunities, and for other 26 purposes, the Secretary shall construct, operate, and maintain the 1 Central Arizona Project, hereinafter referred to as the "Project"; and 2 WHEREAS, the United States and CAWCD have entered into 3 Contract No . 14-06-W-245, Amendment No. 1, dated December 1, 1988, 4 hereinafter referred to as the "Repayment Contract, " which is attached 5 hereto as Exhibit A and by this reference made a part hereof, whereby 6 CAWCD has agreed to repay to the United States the reimbursable costs 7 of the Project allocated to CAWCD; and 8 WHEREAS, Article 8 . 7 (e) of the Repayment Contract grants 9 CAWCD the authority to resell or exchange Excess Water; and 10 WHEREAS, the Contractor is in need of a water supply and H desires to contract with CAWCD for Incentive Recharge Water; 12 NOW, THEREFORE, in consideration of the mutual and dependent 13 covenants herein contained, it is agreed as follows : 14 Repayment Contract Controlling 15 3 . The Contractor expressly approves and agrees to all the 16 terms presently set out in the Repayment Contract, or as such terms 17 may be hereafter amended, and agrees to be bound by the actions to be 18 taken and the determinations to be made under that Repayment Contract, 19 except as otherwise provided herein. Definitions included in the 20 Repayment Contract are applicable to this Agreement, Provided, 21 however, that the terms "Agricultural Water" or "Irrigation Water" 22 shall mean water used for the purposes defined in the Repayment 23 Contract on tracts of land operated in units of more than 5 acres . 24 The first letters of terms so defined are capitalized herein. 25 * * * 26 * * * -2- 1 Additional Definitions 2 4 . "Excess Water" shall mean Project Water which, in any Year, 3 is available for delivery and has not been scheduled for delivery 4 pursuant to a contract with the United States or a subcontract with 5 the United States and CAWCD providing for Project Water service for a 6 period of 50 years or more . 7 5 . "Incentive Recharge Water" shall mean specially priced 8 Excess Water made available by CAWCD to M&I subcontractors on an 9 annual basis for recharge purposes only. 10 Delivery of Water by CAWCD 11 6 . In so far as Project Water supplies and the delivery 12 capability of the Project will permit, and subject to the provisions 13 of the Repayment Contract, CAWCD will deliver Incentive Recharge Water 14 to the Contractor in an amount, and at a water service charge, to be 15 determined in accordance with the terms of this Agreement . The 16 determination of whether and how much Incentive Recharge Water is 17 available for delivery under this Agreement in any year, is a 18 determination within the exclusive discretion of CAWCD; Provided, 19 however, that delivery of Incentive Recharge Water under this 20 Agreement shall be subject to the prior satisfaction of all water 21 deliveries scheduled pursuant to a contract with the United States or 22 a subcontract with the United States and CAWCD providing for Project 23 Water service for a period of 50 years or more . 24 Term 25 7 . This Agreement shall terminate on December 31, 2003, unless 26 the parties agree in writing to extend the term or unless it is sooner -3- M 1 terminated in accordance with Article 15 hereof. 2 Conditions Relating to Delivery and Use 3 8 . The delivery and use of water under this Agreement is 4 conditioned on the following, and the Contractor hereby agrees that : 5 (a) All uses of Project Water and Return Flow shall be 6 consistent with Arizona water law except to the extent that such law 7 is inconsistent with the Congressional directives applicable to the 8 Central Arizona Project . 9 (b) Project Water furnished to the Contractor pursuant to 10 this Agreement shall be used within Contractor ' s service area or place 11 of use for direct or indirect recharge purposes only. The 12 Contractor' s service area or place of use is described in Exhibit B 13 which is incorporated by reference and may be amended by Contractor 14 from time to time. 15 (c) The system or systems through which Project Water is 16 conveyed after delivery to the Contractor shall consist of pipelines, 17 canals, distribution systems, or other conduits which will prevent 18 excessive conveyance losses . 19 (d) Project Water furnished to the Contractor pursuant to 20 this Agreement may not be resold or exchanged by the Contractor 21 without the prior written approval of CAWCD. If, with the prior 22 approval of CAWCD, such water is resold or exchanged by the Contractor 23 for an amount in excess of that which the Contractor is obligated to 24 pay under this Agreement, the excess amount shall be paid forthwith by 25 the Contractor to CAWCD; Provided, however, that the Contractor shall 26 be entitled to recover its actual costs, if any, in transporting and -4- 1 distributing such water . The provisions of this Article 8 (d) shall 2 not apply to any sale or exchange of stored water credits earned by 3 Contractor pursuant to this Agreement . 4 (e) Except as otherwise agreed by CAWCD, the Contractor 5 shall not sell or otherwise dispose of or permit the sale or other 6 disposition of any Project Water for use outside of Maricopa, Pinal, 7 or Pima Counties . 8 (f) Notwithstanding any other provision of this Agreement, 9 Project Water shall not be delivered to the Contractor unless and 10 until the Contractor has obtained final environmental clearance from 11 CAWCD for the system or systems through which Project Water is to be 12 conveyed after delivery to the Contractor at the Contractor ' s Project 13 delivery point. 14 (g) The Contractor may direct that Incentive Recharge Water 15 made available pursuant to this Agreement be delivered to a 16 groundwater savings facility for indirect recharge pursuant to a 17 separate agreement between the Contractor and the operator of the 18 groundwater savings facility; Provided, however, that: 19 (i) Incentive Recharge Water shall be used by an 20 identified groundwater user on a gallon-for-gallon substitute basis 21 directly in lieu of groundwater as provided in A.R. S . § 45-812 . 01 . 22 (ii) The Contractor and the operator of the groundwater 23 savings facility must demonstrate to CAWCD' s satisfaction that they 24 have the appropriate permits issued by the Arizona Department of Water 25 Resources . 26 * * * -5- • 1 (iii) Where the operator of the groundwater savings 2 facility is an agricultural entity participating in CAWCD' s target 3 pricing program, only Project Water over and above the amount of 4 Project Water taken by the agricultural entity in the immediately 5 preceding year, not including Incentive Recharge Water, may qualify as 6 Incentive Recharge Water. 7 (iv) The Contractor shall provide CAWCD a copy of its 8 agreement with the operator of the groundwater savings facility for 9 Incentive Recharge Water. 10 (h) Only Project Water for which the Contractor receives 11 long-term storage credits from the Arizona Department of Water 12 Resources may qualify as Incentive Recharge Water. 13 (i) Upon the expiration of this Agreement, CAWCD will 14 determine whether any Project Water delivered pursuant to this 15 Agreement did not qualify as Incentive Recharge Water for the reasons 16 specified in sections 8 (g) (iii) or 8 (h) of this Agreement. For any 17 such Project Water not qualifying as Incentive Recharge Water, CAWCD 18 will bill the Contractor for the difference between the water service 19 charge for Incentive Recharge Water and the standard M&I water service 20 charge. 21 Procedure for Ordering Water 22 9 . (a) On or before the date of execution of this Agreement, 23 or as soon thereafter as is practicable, CAWCD will notify the 24 Contractor of the amount of Incentive Recharge Water available for 25 delivery during the initial year of this Agreement. The Contractor 26 shall, within a reasonable period of time as determined by CAWCD, -6- 1 submit a written schedule to CAWCD showing the quantity of Incentive 2 Recharge Water desired by the Contractor during each month of the 3 initial year. CAWCD will review the requested schedule and determine 4 whether Incentive Recharge Water is available for delivery, and, if 5 so, the amount of Incentive Recharge Water available for delivery 6 under this Agreement during the initial year. Within thirty (30) days 7 of CAWCD' s receipt of the Contractor ' s requested schedule, CAWCD shall 8 determine and furnish to the Contractor a water delivery schedule 9 which shall show the amount of Incentive Recharge Water projected to 10 be delivered to the Contractor during each month of the initial year, 11 contingent upon the Contractor remaining eligible to receive water 12 under all terms contained herein. 13 (b) The amounts, times, and rates of delivery of Incentive 14 Recharge Water to the Contractor during any subsequent year shall be 15 in accordance with a water delivery schedule for that year. Such 16 schedule shall be determined in the following manner: 17 (i) On or before October 15 of each year beginning 18 with October 15 of the initial year of water delivery, CAWCD shall 19 issue to the Contractor a notice of availability of Incentive Recharge 20 Water for the following year. 21 (ii) Within thirty days of CAWCD' s notice of 22 availability, the Contractor shall submit in writing to CAWCD a water 23 delivery schedule indicating the amounts of Incentive Recharge Water 24 desired by the Contractor during each month of the following year. 25 (iii) Upon receipt of the schedule, CAWCD shall review 26 it together with all other water delivery schedules, and determine the -7- 1 amount of Incentive Recharge Water available for delivery under this 2 Agreement in the following year . 3 (iv) On or before December 15 of each year, CAWCD shall 4 determine and furnish to the Contractor the water delivery schedule 5 for the following year which shall show the amount of Incentive 6 Recharge Water to be delivered to the Contractor during each month of 7 that year, contingent upon the Contractor remaining eligible to 8 receive water under all terms contained herein. 9 (c) The monthly water delivery schedule may be amended upon 10 the Contractor ' s written request to CAWCD. Proposed amendments shall 11 be submitted by the Contractor to CAWCD no later than 15 days before 12 the desired change is to become effective, and shall be subject to 13 review and modification in like manner as the schedule . CAWCD shall 14 notify the Contractor of its action on the Contractor ' s requested 15 schedule modification within 10 days of CAWCD' s receipt of such 16 request. 17 (d) If the Contractor elects to have Incentive Recharge 18 Water made available pursuant to this Agreement delivered to a 19 groundwater savings facility for indirect recharge, CAWCD will 20 coordinate delivery of Incentive Recharge Water directly with the 21 operator of the groundwater savings facility. 22 (e) The Contractor shall hold CAWCD, its officers, agents, 23 and employees, harmless on account of damage or claim of damage of any 24 nature whatsoever arising out of or connected with the actions of 25 CAWCD regarding water delivery schedules furnished by or to the 26 Contractor. -8- 1 Contractor' s Project Delivery Point, Measurement and Responsibility for Distribution of Water 2 10 . (a) Incentive Recharge Water furnished to the Contractor 3 pursuant to this Agreement shall be delivered to the Contractor at 4 such point (s) on the Water Supply System as are agreed upon in writing 5 by CAWCD and the Contractor. All such point (s) shall hereinafter be 6 referred to as the "Contractor ' s Project delivery point. " 7 (b) Unless CAWCD and the Contractor agree by contract to 8 the contrary, the Contractor shall construct and install, at its sole 9 cost and expense, all connection facilities required to convey water 10 furnished to the Contractor pursuant to this Agreement to the 11 Contractor ' s service area or place of use, as the case may be . The 12 Contractor shall furnish, for written approval by CAWCD, drawings and 13 specifications showing all connection facilities to be constructed or 14 installed within the Water Supply System right-of-way, and shall 15 obtain such approval before commencing construction or installation of 16 such facilities . All facilities constructed, installed, operated or 17 maintained on the Water Supply System right-of-way by or for the 18 Contractor shall be subject to such further agreements and to such 19 restrictions and regulations as to type, location, method of 20 installation, operation, and maintenance as may be prescribed by 21 CAWCD. 22 (c) The Contractor shall construct, operate, and maintain 23 its connection facilities and appurtenant works in a good and 24 workmanlike manner and in full compliance with the laws of the State 25 of Arizona and with all laws, regulations, and orders of the United 26 -9- 4 1 States affecting such operations . The failure of the Contractor after 2 due notice to construct, operate, and maintain its connection 3 facilities and appurtenant works in a good and workmanlike manner or 4 to abide by any of the terms and conditions of any applicable laws, 5 regulations, or orders, shall cause this Agreement to be subject to 6 immediate termination at the option of CAWCD. The Contractor shall 7 reimburse CAWCD within thirty (30) days of Contractor ' s receipt of a 8 statement for the costs of repairing any damage to Project facilities 9 or Project rights-of-way caused by or arising out of the Contractor' s 10 activities under this Agreement. 11 (d) Upon termination of this Agreement, the Contractor 12 shall promptly remove, at its sole cost and expense, all connection 13 facilities constructed or installed on the Water Supply System 14 right-of-way and restore said right-of-way and all Project facilities 15 affected to their condition immediately prior to the construction or 16 installation of such connection facilities . If the Contractor fails 17 to remove said connection facilities and restore said right-of-way and 18 Project facilities within thirty (30) days after receiving any written 19 notice from CAWCD to do so, CAWCD may remove said connection 20 facilities and restore said right-of-way and Project facilities at the 21 Contractor' s cost and expense, and, within thirty (30) days after 22 receiving written demand from CAWCD to do so, the Contractor shall pay 23 CAWCD, as specified in such written demand, for all costs and expenses 24 incurred by CAWCD in removing said connection facilities and restoring 25 said right-of-way and Project facilities . 26 * * * -10- 1 (e) If the Contractor' s Project delivery point is a Project 2 turnout or Project turnouts constructed by the United States, and if 3 the Contractor intends to convey water furnished to the Contractor 4 pursuant to this Agreement through connection facilities owned or 5 operated by others, the use by the Contractor of such connection 6 facilities shall be the subject of written agreement (s) between the 7 Contractor and the owner (s) or operator (s) of such connection 8 facilities, and all such agreements shall include such terms and 9 conditions as may be required by CAWCD and shall be subject to the 10 prior, written approval of CAWCD before becoming binding upon the 11 parties thereto. 12 (f) Unless the Contractor' s Project delivery point is a 13 Project turnout or Project turnouts constructed by the United States, 14 all water delivered from the Water Supply System shall be measured 15 with equipment furnished and installed by the Contractor and operated 16 and maintained by the Contractor at the Contractor' s sole cost and 17 expense. The results of such measurements shall be reported to CAWCD 18 in such manner and at such time (s) as CAWCD may prescribe . Upon the 19 request of CAWCD, the accuracy of such measurements shall be 20 investigated by the Contractor, and any errors which are determined to 21 have occurred therein shall be adjusted; Provided, however, that in 22 the event the parties cannot agree on the required adjustment, CAWCD' s 23 determination shall be *conclusive. 24 (g) If the Contractor' s Project delivery point is a Project 25 turnout or Project turnouts constructed by the United States, all 26 water delivered from the Water Supply System shall be measured with -11- 1 equipment furnished and installed by the United States and operated 2 and maintained by CAWCD. Upon the request of the Contractor, or 3 CAWCD, the accuracy of such measurements shall be investigated by 4 CAWCD and the Contractor, and any errors which are mutually determined 5 to have occurred therein shall be adjusted; Provided, however, that in 6 the event the parties cannot agree on the required adjustment, CAWCD' s 7 determination shall be conclusive. 8 (h) Neither the United States nor CAWCD shall be 9 responsible for the control, carriage, handling, use, disposal, or 10 distribution of water beyond the Contractor' s Project delivery point. 11 The Contractor shall hold the United States and CAWCD harmless on 12 account of damage or claim of damage of any nature whatsoever for 13 which there is legal responsibility, including property damage, 14 personal injury, or death arising out of or connected with the 15 control, carriage, handling, use, disposal, or distribution of water 16 beyond the Contractor ' s Project delivery point. 17 Interruptions and Reductions 18 11 . In addition to the right of the United States under 19 Subarticle 8 . 3 (a) (iv) of the Repayment Contract to temporarily 20 discontinue or reduce the amount of water to be delivered, CAWCD may 21 discontinue or reduce the quantity of water to be furnished to the 22 Contractor as herein provided for the purposes of investigation, 23 inspection, construction, testing, maintenance, , or repair, replacement P 24 of any of the Project facilities or any part thereof. CAWCD may also 25 discontinue or reduce the quantity of water to be furnished to the 26 Contractor if there is insufficient Project Water or Project delivery -12- 1 capacity to deliver the Contractor ' s water order, the water orders of 2 other contractors of Incentive Recharge Water and Excess Water 3 service, and all water deliveries scheduled pursuant to a contract 4 with the United States or a subcontract with the United States and 5 CAWCD providing for Project Water service for a period of 50 years or 6 more . So far as feasible, CAWCD shall attempt to coordinate any such 7 discontinuance or reduction with the Contractor and to give the 8 Contractor due notice in advance of such discontinuance or reduction. 9 In case of emergency, no notice need be given. The United States, its 10 officers, agents, and employees, and CAWCD, its officers, agents, and 11 employees, shall not be liable for damages when, for any reason 12 whatsoever, any interruption, discontinuance, or reduction in delivery 13 of water occurs . If any such discontinuance or temporary reduction 14 results in deliveries to the Contractor of less water than what has 15 been paid for in advance, the Contractor shall be entitled to be 16 reimbursed for the appropriate proportion of such advance payments 17 prior to the date of the Contractor ' s next payment of water service 18 charges or the Contractor may be given credit toward the next payment 19 of water service charges if the Contractor should so desire. 20 No Long-Term Commitment to the Delivery of Project Water 21 12 . Nothing in this Agreement shall be construed as an 22 allocation of Project Water to the Contractor, nor shall this 23 Agreement entitle the Contractor to any Project Water other than as 24 provided herein . 25 Quality of Water 26 13 . CAWCD does not warrant the quality of any Project Water -13- 1 furnished under this Agreement and is under no obligation to construct 2 or furnish water treatment facilities to maintain or better the 3 quality of any Project Water. The Contractor waives its right to make 4 a claim against the United States, CAWCD, or any other Project 5 subcontractor or contractor on account of the quality of Project Water 6 or any changes in water quality caused by the commingling of Project 7 Water with other water. 8 Water Service Charges 9 14 . (a) The Contractor shall pay in advance water service 10 charges established annually by CAWCD. On or before the date of 11 execution of this Agreement, or as soon thereafter as is practicable, 12 CAWCD shall notify the Contractor of the water service charges in 13 effect for the initial year of this Agreement . On or before October 14 15 of each year, CAWCD will notify the Contractor of the water service 15 charges in effect for the following year. On or before the first day 16 of each month, the Contractor shall pay CAWCD the water service 17 charges due for Incentive Recharge Water scheduled for delivery during 18 that month. The Contractor shall pay in advance all water service 19 charges established by CAWCD for Incentive Recharge Water scheduled 20 for delivery under this Agreement; Provided, however, that the 21 Contractor shall be relieved of the pumping energy portion of the 22 water service charges associated with any Project Water scheduled for 23 delivery that is not delivered to the Contractor. 24 (b) The payment of all water service charges when due under 25 this Agreement is a condition precedent to delivery of Incentive 26 Recharge Water. -14- 1 (c) The obligation of the Contractor to pay CAWCD as 2 provided in this Agreement is a legally binding obligation of the 3 Contractor notwithstanding the manner in which the obligation may be 4 distributed among the Contractor' s water users and notwithstanding the 5 default of individual water users in their obligations to the 6 Contractor. 7 Termination of Contract 8 15 . If the Contractor remains in arrears in the payment of any 9 charges due CAWCD for a period of 60 days or more, CAWCD may terminate 10 this Agreement, which termination shall be effective 30 days after 11 mailing written notice of termination to the Contractor. The 12 Contractor shall remain obligated to pay all charges required to be 13 paid under this Agreement during the time period until and including 14 the date of termination . The Contractor ' s obligation to pay any 15 amounts due but unpaid as of the date of termination shall survive 16 termination of this Agreement. CAWCD' s right to terminate this 17 Agreement as provided in this Article 15 shall be in addition to the 18 other rights of CAWCD under this Agreement and to all other rights 19 provided by law. 20 Charges for Delinquent Payments 21 16. (a) The Contractor shall be subject to interest, administrative and penalty charges on delinquent installments or 22 payments . The Contractor shall pay an interest charge for each day the payment is delinquent beyond the due date. When a payment becomes 23 60 days delinquent, the Contractor shall pay an administrative charge to cover additional costs of billing and processing the delinquent 24 payment. When a payment is delinquent 90 days or more, the Contractor shall pay an additional penalty charge of 6 percent per year for each 25 day the payment is delinquent beyond the due date . Further, the Contractor shall pay any fees incurred for debt collection services 26 associated with a delinquent payment. -15- 1 (b) The interest charge rate shall be the greater of the rate prescribed quarterly in the Federal Register by the Department of 2 the Treasury for application to overdue payments, or the interest rate of 0 . 5 percent per month prescribed by Section 6 of the Reclamation 3 Project Act of 1939 (Public Law 76-260) . The interest charge rate shall be determined as of the due date and remain fixed for the 4 duration of the delinquent period. 5 (c) When a partial payment on a delinquent account is received, the amount received shall be applied first to the penalty 6 and administrative charges, second, to the accrued interest, and third to the overdue payment . 7 Rules, Regulations and Determinations 8 17 . (a) The parties agree that the delivery of water or the use 9 of Federal facilities pursuant to this Agreement is subject to Reclamation law, as amended and supplemented, and the rules and 10 regulations promulgated by the Secretary of the Interior under Reclamation law. 11 (b) The Contracting Officer shall have the right to make 12 determinations necessary to administer this Agreement that are consistent with the expressed and implied provisions of this 13 Agreement, the laws of the United States and the State of Arizona, and the rules and regulations promulgated by the Secretary of the 14 Interior. Such determinations shall be made in consultation with CAWCD and the Contractor. 15 Compliance with Environmental Laws 16 18 . The Contractor, in carrying out this Agreement, shall comply 17 with all applicable environmental laws and regulations of the United States and the State of Arizona and shall obtain all required permits 18 or licenses from the appropriate Federal, State, or local authorities . 19 Equal Opportunity 20 19 . During the performance of this Agreement, the Contractor agrees as follows : 21 (a) The Contractor will not discriminate against any 22 employee or applicant for employment because of race, color, religion, sex, or national origin. The Contractor will take affirmative action 23 to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, 24 or national origin. Such action shall include, but not be limited to the following: employment, upgrading, demotion, or transfer; 25 recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, 26 including apprenticeship. The Contractor agrees to post in -16- 1 conspicuous places, available to employees and applicants for employment, notices to be provided by the Contracting Officer setting 2 forth the provisions of this nondiscrimination clause . 3 (b) The Contractor will, in all solicitations or advertisements for employees placed by or on behalf of the Contractor, 4 state that all qualified applicants will receive consideration for employment without discrimination because of race, color, religion, 5 sex, or national origin. 6 (c) The Contractor will send to each labor union or representative of workers with which it has a collective bargaining 7 agreement or other contract or understanding, a notice, to be provided by the Contracting Officer, advising said labor union or 8 workers ' representative of the Contractor ' s commitments under Section 202 of Executive Order 11246 of September 24, 1965, as amended, and 9 shall post copies of the notice in conspicuous places available to employees and applicants for employment . 10 (d) The Contractor will comply with all provisions of 11 Executive Order No. 11246 of September 24 , 1965, as amended, and of the rules, regulations, and relevant orders of the Secretary of Labor. 12 (e) The Contractor will furnish all information and reports 13 required by said amended Executive Order and by the rules, regulations, and orders of the Secretary of Labor, or pursuant 14 thereto, and will permit access to its books, records, and accounts by the Contracting Officer and the Secretary of Labor for purposes of 15 investigation to ascertain compliance with such rules, regulations, and orders . 16 (f) In the event of the Contractor' s noncompliance with the 17 nondiscrimination clauses of this Agreement or with any of such rules, regulations, or orders, this Agreement may be canceled, terminated, or 18 suspended, in whole or in part, and the Contractor may be declared ineligible for further Government contracts in accordance with 19 procedures authorized in said amended Executive Order, and such other sanctions may be imposed and remedies invoked as provided in said 20 amended Executive Order, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law. 21 (g) The Contractor will include the provisions of 22 paragraphs (a) through (g) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of 23 Labor issued pursuant to Section 204 of said amended Executive Order, so that such provisions will be binding upon each subcontractor or 24 vendor . The Contractor will take such action with respect to any subcontract or purchase order as may be directed by the Secretary of 25 Labor as a means of enforcing such provisions, including sanctions for noncompliance; Provided, however, that in the event the Contractor 26 becomes involved in, or is threatened with, litigation with a -17- i subcontractor or vendor as a result of such direction, the Contractor may request the United States to enter into such litigation to protect 2 the interests of the United States . 3 Compliance With Civil Rights Laws and Regulations 4 20 . (a) The Contractor shall comply with Title VI of the Civil Rights Act of 1964 (42 U. S .C. 2000d) , Section 504 of the 5 Rehabilitation Act of 1975 (Public Law 93-112, as amended) , the Age Discrimination Act of 1975 (42 U. S .C. 6101, et seq. ) and any other 6 applicable civil rights laws, as well as with their respective implementing regulations and guidelines imposed by the U.S . Department 7 of the Interior and/or Bureau of Reclamation. 8 (b) These statutes require that no person in the United States shall, on the grounds of race, color, national origin, 9 handicap, or age, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any 10 program or activity receiving financial assistance from the Bureau of Reclamation. By executing this Agreement, the Contractor agrees to 11 immediately take any measures necessary to implement this obligation, including permitting officials of the United States to inspect 12 premises, programs, and documents . 13 (c) The Contractor makes this Agreement in consideration of and for the purpose of obtaining any and all Federal grants, loans, 14 contracts, property discounts or other Federal financial assistance extended after the date hereof to the Contractor by the Bureau of 15 Reclamation, including installment payments after such date on account of arrangements for Federal financial assistance which were approved 16 before such date . The Contractor recognizes and agrees that such Federal assistance will be extended in reliance on the representations 17 and agreements made in this article, and that the United States reserves the right to seek judicial enforcement thereof. 18 Books, Records, and Reports 19 21 . The Contractor shall establish and maintain accounts and 20 other books and records pertaining to administration of the terms and conditions of this Agreement, including: the Contractor ' s financial 21 transactions, water supply data, project operation, maintenance and replacement logs, and Project land and right-of-way use agreements; 22 the water users ' land-use (crop census) , land ownership, land-leasing and water-use data; and other matters that CAWCD may require. Reports 23 thereon shall be furnished to CAWCD in such form and on such date or dates as CAWCD may require. Subject to applicable Federal laws and 24 regulations, each party to this Agreement shall have the right during office hours to examine and make copies of each other party' s books 25 and records relating to matters covered by this Agreement . 26 * * * -18- 1 Notices 2 22 . Any notice, demand, or request authorized or required by this Agreement shall be deemed to have been given, on behalf of CAWCD, 3 when mailed, postage prepaid, or delivered to Chuck Sweet, Town Manager, 11000 N. La Canada Drive, Oro Valley, Arizona, 85737-7015, 4 and on behalf of the Contractor when mailed, postage prepaid, or delivered to the General Manager, Central Arizona Water Conservation 5 District, 23636 North Seventh Street, Phoenix, Arizona 85024 . The designation of the addressee or the address may be changed by notice 6 given in the same manner as provided in this Article for other notices . 7 Assignment Limited--Successors and Assigns Obligated 8 23 . The provisions of this Agreement shall apply to and bind the 9 successors and assigns of the parties hereto, but no assignment or transfer of this Agreement or any right or interest therein shall be 10 valid unless and until approved in writing by CAWCD. The provisions of this Article 23 shall not apply to any assignment or transfer of 11 stored water credits earned by Contractor pursuant to this Agreement . 12 Cancellation 13 24 . This Agreement is subject to cancellation in accordance with the provisions of A.R. S . § 38-511 . 14 IN WITNESS WHEREOF, the parties hereto have executed this 15 Agreement No . effective the day and year first 16 above-written. 17 CENTRAL ARIZONA WATER 18 CONSERVATION DISTRICT 19 20 Attest: By: Secretary President 21 22 TOWN OF ORO VALLEY 23 24 Attest : By: 25 Title : Tama Clerk Title : Mayor 26 -19- i Approved as to form: 2 3 lo\incentive\Oro Valley 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 -20- EXHIBIT A OUPLICATEORIGINAL Contract No. 14-06-W-245 Amendment No. 1 1 B.C. Draft 11/28/88 2 3 4 UNITED STATES DEPARTMENT OF THE INTERIOR 5 BUREAU OF RECLAMATION 6 CONTRACT BETWEEN THE UNITED STATES AND THE CENTRAL ARIZONA WATER CONSERVATION DISTRICT 7 FOR DELIVERY OF WATER AND REPAYMENT OF COSTS OF THE CENTRAL ARIZONA PROJECT 8 INDEX 9 Article No. Title Page No. 10 1. PARTIES 1 11 2. AUTHORITIES 1 12 3. RECITALS 2 13 4. ARTICLES OF AGREEMENT 3 14 5. DEFINITIONS 3 15 6. PROJECT CONSTRUCTION 10 16 .1 Agreement of the United States 10 17 .2 Costs of Project 11 .3 Principal Works of the Project 12 18 .4 Changes in Project Works 13 .5 Construction Conditions 14 19 .6 Annual Work Program 14 .7 Inability of the United States to Complete 20 Project on Basis of Cost Estimates 15 21 7. PROJECT OPERATION, MAINTENANCE, AND REPLACEMENT 15 22 . 1 Operation and Maintenance and Water Deliveries 23 by the United States Prior to Completion of Construction 15 24 .2 Operation and Maintenance and Water Deliveries after Completion of Construction 16 25 26 Article No. Title Page No. 1 8. DELIVERY OF WATER 16 2 . 1 Obligation of United States 16 .2 Term of Contract 17 3 .3 Conditions Relating to Delivery 17 .4 Delivery Points 19 4 .5 Measurement Z0 .6 Responsibility for Distribution of Water 5 after Leaving Water Supply System 21 .7 Quantity of Water to be Delivered 21 6 .8 Subcontracts Z4 .9 Shortages 27 7 . 10 Rate of Diversions of Colorado River Water . 28 . 11 Priority in Case of Shortage Z9 8 . 12 No Guarantee of Availability of Water 29 . 13 Secretarial Control of Return Flow 30 9 . 14 Water and Air Pollution Control 31 . 15 Quality of Water 31 10 . 16 Exchange Water 31 . 17 Rights Reserved to the United States to Have 11 Water Carried by Project Facilities 32 . 18 Wheeling Non-Project Water 32 12 . 19 Use of Project Power to Wheel Non-Project Water 33 13 9. PAYMENT OF PROJECT COSTS ALLOCATED TO 1 4 CONTRACTOR 33 .1 Allocation of Construction Costs 33 15 .2 Repayment Conce is p 34 .3 Contractor' s Construction Cost Repayment 16 Obligation 36 .4 Payment of Contractor' s Construction Cost 17 Repayment Obligation P 9 42 .5 Commercial Power Rates 44 18 .6 Other Costs Borne bythe Contractor 44 .7 Repayment of Costs of Excess Capacity in 19 Granite Reef Aqueduct q 47 • .8 Ad Valorem Taxes, Assessments, Tolls, and Z0 Other Charges 47 .9 Continuation of Payments after Project 21 Payout 47 22 . 10 Defaults . . . . . . . . . . . . . . . . . . . 48 23 10. GENERAL PROVISIONS 48 .1 Other Contracts 48 24 .2 Title to Project Works . � 48 25 .3 Reserve Funds 48 26 Article No. Title Page No. 1 .4 Recreational Use of Water Facilities 51 .5 Confirmation of Contract 51 2 .6 Rules, Regulations, and Determinations . ... . . 52 . 7 Books, Records, and Reports 53 3 .8 Notices . . . . . . . . 53 .9 Contingent on Appropriation or Allotment 4 of Funds 54 . 10 Changes in Contractor' s Organization 54 5 .11 Assignment Limited--Successors and Assigns Obligated 54 6 . 12 Judicial Remedies Not Foreclosed 55 . 13 Equal Opportunity 55 7 . 14 Compliance with Civil Rights Laws and Regulations . . . . . . . . . . . . . . . . . 57 8 . 15 Officials Not to Benefit 58 9 11. STATUS OF DECEMBER 15, 1972 CONTRACT 58 10 11-' 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Contract No. 14-06-W-245 Amendment No. 1 B.C. Draft 11/28/88 1 •2 UNITED STATES 3 DEPARTMENT OF THE INTERIOR BUREAU OF RECLAMATION 4 CONTRACT BETWEEN THE UNITED STATES 5 AND THE CENTRL ARIZONA WATER CONSERVATION DISTRICT FOR DELIVERY OF WATER AND REPAYMENT OF COSTS OF THE 6 CENTRAL ARIZONA PROJECT 7 1. PARTIES 8 The parties to this contract, executed as of this first day of 9 December, 1988, are the United States of America, acting through the 10 Department of the Interior, and the Central Arizona Water Conservation 11 District, a multi-county water conservation district organized under 12 the laws of Arizona, with its principal place of business in Phoenix, 13 Arizona. 14 2. AUTHORITIES 15 This contract is made pursuant to the: 16 2. 1 Act of June 17, 1902, 32 Stat. 388, and acts amendatory 17 thereof and supplementary thereto. 18 2.2 Boulder Canyon Project Act, approved December 21, 1928, 19 45 Stat. 1057, a supplement to the Federal Reclamation Laws. 20 2.3 Reclamation Project Act of 1939, approved August 4, 1939, 21 53 Stat. 1187, as amended. 22 2.4 Colorado River Basin Project Act , approved 23 September 30, 1968, 82 Stat. 885, as amended, a supplement to the Federal 24 Reclamation Laws. 25 26 1 2.5 Arizona Revised Statutes, Section 48-3701 et seq. 2 3. RECITALS 3 3.1 The Colorado River Basin Project Act provides, among other 4 things , that for the purposes of furnishing irrigation water 5 and municipal and industrial water supplies to water-deficient areas 6 in Arizona and western New Mexico through direct diversion or exchange 7 of water, control of floods, conservation and development of fish and 8 wildlife resources , enhancement of recreation opportunities , and 9 for other purposes, the Secretary of the Interior shall construct, p 10 operate, and maintain the Central Arizona Project, consisting of the 11 principal works hereinafter described in Article 6. 3. 12 3.2 Pursuant to the provisions of Arizona Revised Statutes, 13 Section 48-3701 et seg. , the Central Arizona Water Conservation District 14 has been organized with the power to enter into a contract or contracts with 15 the Secretary of the Interior to accomplish the purposes of Arizona Revised 16 Statutes, Section 48-3701 et seq. 17 3.3 On December 15, 1972, the United States and the Contractor 18 entered into a contract entitled "Contract Between the United States and the 19 Central Arizona Water Conservation District for Delivery of Water and 20 Repayment of Costs of the Central Arizona Project" ( Contract 21 No. 14-06-W-245), whereby, among other things, the United States agreed to 22 construct the Central Arizona Project and the Contractor agreed to repay the 23 costs of the project properly allocable to the Contractor. 3.4 Subarticle 9. 3(b) of said contract provides that the 24 25 Contractor' s repayment obligation shall not exceed $1.2 billion. 26 3.5 Subarticle 9.3(b) of said contract also provides that if the 2 1 Contractor ' s repayment obligation will exceed $1 . 2 billion , the 2 Contracting Officer shall consult with the Contractor and continuation of 3 construction will be contingent upon the execution of an amendatory contract 4 to cover the increased repayment obligation. 5 3. 6 Both parties acknowledge that the Contractor' s repayment 6 obligation will exceed $1. 2 billion, and have agreed to increase the 7 Contractor' s repayment ceiling to a level sufficient to facilitate 8 completion of the project. 9 4. ARTICLES OF AGREEMENT 1 O NOW, THEREFORE, in consideration of the mutual and dependent 11 stipulations and covenants herein contained, it is agreed by and between the 12 parties hereto as follows: 13 5. DEFINITIONS When used herein, unless otherwise distinctly expressed, or 14 , 15 manifestly incompatible with the intent hereof, the terms: 5. 1 "Federal Reclamation Laws" or "Reclamation Laws" shall 16 17 mean the Act of June 17, 1902, 32 Stat. 388, and all acts amendatory 18 thereof or supplementary thereto. 19 5.2 "Basin Project Act" shall mean the Colorado River Basin 20 Project Act, 82 Stat. 885, dated September 30, 1968, as amended, which is a 21 supplement to the Federal Reclamation Laws. 5.3 "Secretary" shall mean the Secretary of the Interior of the 22 United States or his duly authorized representative. 23 24 5.4 "Contracting Officer" shall mean the Secretary or his authorized designee acting in his behalf. 25 5. 5 "Contractor" shall mean the Central Arizona Water 26 3 1 Conservation District, organized pursuant to Arizona Revised Statutes, 2 Section 48-3701 et seq. 3 5.6 "Service area" shall mean the area now i ncl udc,F within 4 the Central Arizona Water Conservation District, consisting of aricopa, 5 P i nal , and Pima Counties of Arizona and such other count ss as may 6 hereafter become part of the District, exclusive of any Indian reservation 7 land lying wholly or partly within said Counties. 8 5.7 "Subcontractor" shall mean any irrigation district, 9 municipality, individual , or any entity which enters into a water service 10 subcontract with the United 'States and the Contractor in furtherance of the 11 provisions of the Basin Project Act. 12 5.8 ' "Central Arizona Project" or "project" shall mean the 13 project and works authorized by Section 301(a) of the Basin Project 14 Act and constructed by the United States pursuant to the provisions 15 of said Act and this contract. 16 5.9 "Project works" shall mean the principal works described 17 in Section 301(a) of the Basin Project Act, and appurtenances thereto, 18 or as modified pursuant to Article 6. 4 hereof, together with lands, 19 interests in lands, and rights-of-way for such works and appurtenances. 20 5.10 "Water supply system" shall mean the Navajo Project, Havasu 21 Pumping Plant, the Granite Reef, Salt Gila and Tucson aqueducts and 22 associated pumping plants and appurtenant works, but not including Tucson 23 Terminal Storage or any distribution works. 24 5. 11 "Distribution works" shall mean those facilities 25 constructed or financed by the United States under the authorization in 26 Section 309(b) of the Basin Project Act for the primary purpose of 4 1 distributing the project water. supply within the service area after said 2 project water supply has been transported or delivered through the water 3 supply system. 4 5. 12 "Agricultural water" or "irrigation water" shall mean 5 project water used primarily in the commercial production of agricultural 6 crops or livestock, including domestic use incidental thereto, on tracts of 7 land operated in units of more than 5 acres. 8 5. 13 "Miscellaneous water" shall mean water delivered from the g project, or by exchange for project water, for recreational and fish and 10 wildlife purposes at other than project facilities and shall have a lesser 11 priority of use than agricultural water. 12 5. 14 "Municipal and industrial water, " herein referred 13 to as "M&I water," shall mean project water other than agricultural or 14 miscellaneous water delivered by means of the project works. 15 5. 15 "Lands not having a recent irrigation history" shall 16 mean, except where otherwise determined by the Secretary for efficiency of 17 subcontractor' s operation, lands which the Secretary determines were not 18 irrigated during the period September 30, 1958, to September 30, 1968. 19 5. 16 "OM&R" shall mean the care, operation, maintenance, and 20 replacement of project works. 21 5. 17 "Exchange water" shall mean Colorado River water made 22 available in exchange for or in replacement of existing supplies from 23 surface sources other than" the mainstream of the Colorado River. 24 5. 18 "Transferred works" shall mean such facilities of the water 25 supply system or of other construction stages as to which OM&R 26 5 1 responsibility is transferred from the United States to the Operating 2 Agency. 3 5. 19 "Operating Agency" shall mean the entity or entities 4 authorized to assume OM&R responsibility of transferred works and approved 5 for that purpose by the Contracting Officer. 6 5.20 "Transfer notice" shall mean a written notice or notices, 7 numbered consecutively, which the Contracting Officer transmits to the 8 Operating Agency and which shall designate: 9 (a) the transferred works; 10 (b) items of equipment and supplies transferred to the 11 Operating Agency; and 12 (c) the date upon which such transfer will be effected. 13 5. 21 "Gila River system waters" shall mean waters of the 14 Gila River and tributaries thereof east of the Yuma-Maricopa County line. 5. 22 "Notice of completion" shall mean the notice which the 15 16 Contracting Officer issues to Contractor to announce the substantial completion of a construction stage. Each such notice of completion shall 17 p 18 include the estimated amount of the repayment obligation for the 19 construction stage to which the notice pertains, the date of initiation of 20 repayment for the construction stage and indicate the amount and due date 21 for the first payment for the construction stage. 22 5. 23 "Development Fund" shall mean the separate fund, known 23 as the Lower Colorado River Basin Development Fund, established in 24 the Treasury of the United States pursuant to Section 403(a) of the 25 Basin Project Act. 26 5.24 "Year" shall mean the period January 1 through the next 6 1 succeeding December 31. 2 5. 25 "Contractor' s Construction Cost Repayment Obligation , " 3 hereinafter referred to as "repayment obligation," shall mean the total 4 amount of all construction costs including related construction claims and 5 interest thereon, OM&R costs during construction, and interest on costs 6 allocated to the M&I water and power functions during construction, of the 7 Central Arizona Project, incurred therefor and as determined by the 8 United States and further described in Article 6. 2 hereof, excluding 9 reimbursable costs allocated to fish and wildlife and recreation, and costs 10 associated with the delivery of water to entities other than the Contractor 11 or subcontractors, and which is determined by the Secretary, after 12 consultation with the Contractor, to be allocable to and repayable by the 13 Contractor in accordance with the provisions of the Basin Project Act and 1 4 this contract. 15 5. 26 "Return flow" shall mean all agricultural , M&I, and 16 miscellaneous waste water, seepage, and ground water which originates or 17 results from water contracted for from the Central Arizona Project, but 18 shall not include any water delivered through the project works for ground 19 water recharge purposes. 20 5.27 "Project water" shall mean (a) all water allocated by the Secretary for project purposes by Federal Register notice dated 21 March 24, 1983 , and any subsequent reallocation by the Secretary as 22 23 contemplated in paragraph -6 of said Federal Register notice, which water is 24 available pursuant to contracts with the Secretary from: ( 1) the 25 Colorado River; (2) Central Arizona Project dams and reservoirs; and (3) 26 return flows captured by the Secretary for project use;- (b) any water 7 1 delivered to entities in Arizona , through the project works, as a 2 replacement supply 1 for Cliff Dam; (c) water delivered to water users in through the project works, in exchange for water delivered to users 3 Arizona9 4 in New Mexico from or by means of the project works; and (d) any additional water not (a)included inabove, that is required to be delivered by the 5 through the project, pursuant to the Ak-Chin Water Rights 6 Secretary Settlement Act of 1978 (Public Law 95-328), as amended on October 19, 1984 7 8 (Public Law 98-530); the Southern Arizona Water Rights Settlement Act of October 12, 1982 (Title III of Public Law 97-293); and, subject to the 9 10 execution of a settlement agreement by the Contractor providing for the 11 settlement of the water rights claims of the Salt River Pima-Maricopa Indian Community and to the Salt River P i ma-Mari copa Indian Community Water Rights 12 13 Settlement Act of 1988 (Public Law 100-512), up to 22,000 acre-feet annually of Colorado River water to be delivered through the project works in 14 accordance with said settlement agreement and legislation. 15 5:78 "Indian lands" shall mean the lands within any Indian 16 reservation for which an allocation of project water has or will be made by 17 the Secretary for delivery through project works. 18 5.29 "Navajo Project" shall mean the interests of the United 19 ' States in the Navajo Generating Station and the Transmission System, or any 20 replacement thereof, as authorized by Section 303 of the Basin Project Act 21 and as described in contracts entered into pursuant to that Act. 22 5. 30 "Construction stage" shall mean any one of the following: 23 ( 1) the water supply y 1 system; (2) New Waddell and Modified Roosevelt Dams; 24 . (3) replacement acement features or programs for Cliff Dam; (4) Tucson terminal 25 storage; (5) Hooker Dam or suitable alternative; and (6) Buttes Dam. 26 8 1 5. 31 "Plan 6" shall mean Plan 6 for the Regulatory Storage 2 Division of the Central Arizona Project as approved by Record of Decision 3 of the Secretary dated April 3, 1984 as amended and supplemented by Records 4 of Decision of the Secretary dated May 20, 1986 (Supplement One) and 5 June 17, 1988 (Supplement Two). 6 5.32 "Allocable cost" shall mean (a) with respect to the project, 7 the total project cost less (1) the cost of non-Indian distribution works, 8 (2) the cost of the safety of dams component of Plan 6, (3) the cost of 9 Indian distribution systems, (4) the cost of the Colorado River Division and 10 the New Mexico fish hatchery, (5) the cost of cultural resources studies, 11 (6) the contributions provided by the States of Arizona and New Mexico prior 12 to execution of the Plan 6 Funding Agreement, (7) the costs of Charleston 13 Dam and San Pedro Aqueduct, (8) the cost of 500 cubic feet per second of 14 incremental capacity in the Granite Reef Aqueduct and related costs in the 15 Navajo Project, and (9) such other costs as determined appropriate by the 16 Contracting Officer; and (b) with respect to each construction stage, the 17 total cost of such stage less that portion of the following costs associated 18 with such stage: (1) the cost of the safety of dams component of Plan 6, 19 (2) the cost of cultural resources studies, (3) the contributions provided 20 by the States of Arizona and New Mexico prior to execution of the Plan 6 21 Funding Agreement, (4) the cost of 500 cubic feet per second of incremental capacity in the Granite Reef Aqueduct and related costs in the Navajo 22 Project, and ( 5) such other costs as determined appropriate by the 23 Contracting Officer. 24 25 5.33 "OM&R Transfer Contract" shall mean the August 5, 1987, contract entitled "Contract Between the United States of America and the 26 9 1 Central Arizona Water Conservation District for the Transfer of Operation 2 and Maintenance of Facilities" (Contract No. 7-07-30-W0167) , and any 3 amendment or revision thereof. 4 5.34 "Overall repayment period" shall mean the period of time 5 g g be innin with initiation of repayment of the first construction stage and • 6 ending with final payment of the last construction stage. 7 5.35 "Plan 6 Funding Agreement" shall mean the April 15, 1986, 8 agreement entitled "Agreement Among the United States, the Central Arizona 9 Water Conservation District, the Flood Control District of Mari cops County, 10 the Salt River Agricultural Improvement and Power District and Salt River 11 Valley Water Users' Association, the Arizona Cities of Chandler, Glendale, 12 Mesa, Phoenix, Scottsdale, and Tempe, the State of Arizona, and the City of Tucson for Funding of Plan Six Facilities of the Central Arizona Project, 13 g 14 Arizona, and for other Purposes," as it may be supplemented or amended. 15 5.36 "Permanent service" shall mean that water supply service 16 commencing in the year following substantial completion of the water supply 17 system and continuing in perpetuity. 5. 37 "Ground water recharge" shall mean the recharge of water 18 19 pursuant to title 45, chapter 2, article 13, Arizona Revised Statutes, or 20 the underground storage and recovery of water pursuant to title 45, chapter 3, Arizona Revised Statutes, or as said statutes may hereafter be 21 amended or revised. 22 5. 38 "Project power" shall mean the United States' entitlement 23 to capacity and energy from the Navajo Project. 24 6. PROJECT CONSTRUCTION 25 6. 1 Agreement of the United States. Subject to the terms and 26 10 1 conditions of this contract and within the limits of the funds made 2 available therefor by Congress, the United States will expend toward the 3 construction of the project, exclusive of interest costs during 4 construction, $832, 180,000 based on 1967 cost estimates, plus or minus such 5 amounts, if any, as may be justified by reason of ordinary fluctuations in 6 construction costs as indicated by engineering cost indices applicable to 7 the types of construction involved therein, or so much of such amount, as in 8 the opinion of the Secretary, is necessary to construct said project, 9 whichever amount is the lesser. The aforementioned amount includes the 10 United States' costs of participation in the Navajo Project. 11 6.2 Costs of Project. 12 (a) The estimated construction cost of $832,180,000 for the 13 project, based upon 1967 prices, has been determined as follows: Main System $ 1,000' s 14 Granite Reef Division 407,740 Orme Division 42,340 15 Salt—Gila Division 47,170 Tucson Aqueduct (Colorado River source) 46,300 16 Buttes Dam 35,240 Navajo Project 106,000 17 Subtotal 684,790 Other Separate Features 18 Hooker Dam or suitable alternative 31,730 Charleston Dam and San Pedro Aqueduct 19 (San Pedro River source) 36 420 Subtotal 68, 150 20 Miscellaneous Features *Gila River Division 5,250 21 Indian Distribution System 19,970 Colorado River Division 42,450 22 Drainage System 11,570 Subtotal 79,240 23 Total Project $832, 180 24 *Note: Fish hatchery costs , some of which may be located on the 25 Colorado-•River. 26 Provided, however, That ( i ) the adjustment provisions of Article 6. 1 apply 11 1 to the total construction costs of the project and not to the costs of the 2 individual line items set out in this Subarticle 6.2(a) , and (ii ) in 3 accordance with provisions of Article 6.4 herein, the references to the 4 individual line items set out in this Subarticle 6.2(a) are not to be deemed 5 a determination that each of the features referred to in the individual line 6 items will be constructed or that costs will be incurred for each of said 7 individual line items based upon a percentage which the estimated costs for 8 each individual line item bears to the project' s total estimated 9 construction costs. (b) The Central Arizona Project costs incurred by the 10 11 United States which are to be repaid by Contractor shall include the share to the Contractor of (i ) construction costs of the project, (ii) 12allocated 13 all expenses of whatsoever kind or nature heretofore or hereafter incurred 14 by the United States in connection with, growing out of, or resulting from 15 the construction, and (iii ) the OM&R during construction of project works. 16 The aforementioned share of allocated costs shall also include, but shall not be limited to, interest during construction on costs allocated to the 17 18 MI water and power functions, the cost of labor, materials, equipment, engineering , legal services , surveys , investigations , property, 19 superintendence, administration , overhead, general expenses, special 20 services, damages of all kinds and character, inspection, repair, and 21 protection of project works and water supply, and the costs of all lands, 22 interests in lands, and rights-of-way acquired by the United States for the 23 project, all as determined by the Secretary. 24 6.3 Principal Works of the Project. The works and facilities to 25 26 be con struct 'Vrnier this contract shall consist of the following principal 12 1 works: 2 (a) A system of main conduits and canals, including the 3 Havasu Pumping Plant and a main canal and pumping plants (Granite Reef 4 Aqueduct and pumping plants) , for diverting and carrying water from 5 Lake Havasu to the confluence of the Salt and Verde Rivers, which system 6 will have a capacity of 3,000 cubic feet per second; 7 (b) Salt-Gila Aqueduct and pumping plant; 8 (c) Tucson Aqueduct and pumping plants; 9 (d) New Waddell and Modified Roosevelt Dams; 10 (e) replacement features or programs for Cliff Dam; 11 (f) Tucson Terminal Storage (if approved by the Secretary); 12 (g) Buttes Dam and Reservoir; 13 (h) Hooker Dam and Reservoir or suitable alternative which 14 shall be constructed in such manner as to give effect to the provisions of 15 Section 304(f) of the Basin Project Act; 16 (1) Charleston Oam and Reservoir and the San Pedro Aqueduct; 17 (j) related canals, regulating facilities, and electric 18 transmission facilities required for the operation of said principal works; 19 (k) related water distribution and drainage works; and 20 (1) appurtenant works. 21 No works or facilities for the treatment of water are included in the 22 project works to be constructed by the United States. Nothing contained herein shall be construed to indicate the order in which the aforedescribed 23 24 works will be constructed. 25 6.4 Changes in Project Works. Should the Secretary, either 26 before or during construction, determine it to be in the best interests of 13 1 the project, he may, upon the completion of the studies currently being made 2 er to be made, including land classifications, hydrological , engineering, 3 geological , sedimentation, water supply, and repayment ability, and after 4 consultation with the Contractor, change the location, size, or capacity of 5 any of the project works, or may eliminate works, or add works to those 6 described above , and the Secretary ' s decision on such changes , 7 eliminations, and additions shall be conclusive. 8 6.5 Construction Conditions. The United States shall be under 9 no obligation to commence or, having commenced, to continue construction of 10 project works until transfer from the State of Arizona of such State-owned 11 lands or interests therein, in a form acceptable to the Attorney General of 12 the United States, as the Secretary determines is necessary in the 13 construction, operation, or maintenance of the project. 14 6.6 Annual Work Program. During construction of the project 15 works the Contracting Officer will consult with the Contractor and/or with 16 any subcontractor through or within whose service area project works are to 17 be constructed to achieve maximum coordination between such construction 18 program and the annual programs of any affected subcontractor. Within 19 30 days following the enactment by Congress and Presidential approval of 20 annual or supplementary appropriation acts and the allotment of funds thereunder for continued construction of the project, the United States will 21 furnish the Contractor with a notice and statement showing the proposed 22 construction -program for the balance of the current fiscal year and for the 23 following fiscal year or years. If so requested in writing by the 24 25 Contractor within 30 days of its receipt of such notice, the Secretary will 26 consult with the Contractor and/or the affected subcontractor with respect 14 1 to the proposed program. The action of the Contracting Officer concerning 2 the program after such consultation shall be final . 3 6.7 Inability of the United States to Complete Project on Basis 4 of Cost Estimates. If construction of the project works shall have been 5 commenced but, prior to completion, the Secretary determines that the cost 6 of constructing the project will exceed the maximum amount to be expended 7 therefor by the United States as provided for in Article 6. 1 hereof, the 8 Secretary may after consultation with the Contractor terminate construction 9 and declare the obligations of the United States hereunder with regard to 10 completion of construction of the project to have been fulfilled. If 11 appropriations for the continuance and/or completion of construction in 12 amounts sufficient in the opinion of the Secretary to complete said 13 construction are authorized by Congress and are available, the Secretary 1 4 shall consult with the Contractor and shall make continuation of 15 construction contingent upon the execution of an amendatory contract with 1 6 the Contractor wherein the Contractor' s maximum repayment obligation is 17 increased so as to cover the increased reimbursable costs as determined by 1 8 the Secretary; Provided, however, That the Contractor shall not utilize any 19 part of the completed or unfinished project facilities in the absence of 20 written agreement with the Secretary for reimbursement therefor. 21 7. PROJECT OPERATION, MAINTENANCE, AND REPLACEMENT 22 7. 1 Operation and Maintenance and Water Deliveries by the 23 United States Prior to Completion of Construction. Except as provided in 2 4 the OM&R Transfer Contract, prior to completion of project works by the 25 United States, as determined and announced to the Contractor in writing by 26 the Secretary, the United States will operate and maintain said project 15 1 facilities. The cost of said OM&R allocated to the Contractor shall be 2 included in the Contractor' s repayment obligation; Provided, however, That 3 said OM&R cost shall not be included with the project cost ceiling set out 4 in Article 6. 1 hereof. During the aforesaid period, project water, if 5 available, may be disposed of by the Secretary at charges which the 6 Secretary determines to be appropriate; Provided, however, That to the 7 extent deemed feasible by the Secretary, preference will be given to 8 subcontractors and Indian lands. Payment for water shall be made in advance 9 by the water user. The places of measurement and delivery of said water 10 shall be established by the Secretary after consultation with the 11 Contractor. Except as provided in the OM&R Transfer Contract, the proceeds 12 accruing from the disposal of such water shall be credited to the 13 Development Fund and applied toward the costs of the project as determined 1 4 by the Secretary. 15 7.2 Operation and Maintenance and Water Deliveries after 16 Completion of Construction. Except as provided in the OM&R Transfer 17 Contract and any future agreements for the transfer of OM&R of the project 18 works or portions thereof, upon completion of construction of a 19 construction stage or upon completion of construction of the project, the 20 United States shall operate and maintain such construction stage or the 21 project and shall make project water available to project water users. 22 8. DELIVERY OF WATER 23 8. 1 Obligation of United States . Subject to the terms , 24 conditions, and provisions set forth herein, the United States will deliver 25 project water to Contractor and, during such periods as it operates and 26 maintains the water supply system, the United States will also transport and 16 1 deliver said water to the subcontractors. After transfer of OM&R the 2 United States will make deliveries of Colorado River water to- the Operating 3 Agency; deliveries of other project waters will be made pursuant to 4 determinations made by the Secretary. 5 8.2 Term of Contract. Subject to the terms, conditions, and 6 provisions set forth herein, this contract is for permanent service. 7 8.3 Conditions Relating to Delivery. 8 (a) The obligation of the United States to deliver water 9 under this contract is subject to: 10 ( i) The availability of such water for use in Arizona 11 under the provisions of the Colorado River Compact, 12 executed November 24, 1922; the Boulder Canyon 13 Project Act, 45 Stat. 1057, dated December 21, 14 1928; the Colorado River Basin Project Act, dated 15 September 30, 1968, 82 Stat. 885; the contract 16 between the United States and the State of Arizona, 17 dated February 9, 1944; the Opinion of the 18 Supreme Court of the United States in the case of 19 Arizona v. California et a-1 . , 373 U. S. 546 , 20 rendered June 3, 1963; and the March 9, 1964, Z1 Decree of that Court in said case, 376 U.S. 340, as 22 amended on February 28, 1966, at 383 U.S. 268, and 23 supplemented on January 9, 1979, at 439 U.S. 419, 24 as now issued or hereafter modified. (ii) Executive A, Seventy-eighth Congress, Second 25 26 Session, a treaty between the United States of 17 1 America and the United Mexican States, signed at 2 Washington on February 3, 1944, relating to the 3 utilization of the water of the Colorado River and 4 Tijuana River and of the Rio Grande from 5 Fort Quitman, Texas, to the Gulf of Mexico, and 6 Executive H , Seventy - eighth Congress , 7 Second Session, a protocol signed at Washington on 8 November 14, 1944, supplementary to the Treaty. 9 (iii ) The express understanding and agreement by the Contractor that this contract is subject to 10 the condition that Hoover Dam and Lake Mead shall 11 be used: first, for river regulation, improvement 12 of navigation, and flood control; second, for 13 irrigation and domestic uses and satisfaction of 14 present perfected rights in pursuance of 15 Article VIII of the Colorado River Compact approved 16 by Section 13(a) of the Boulder Canyon Project Act; 17 and third, for power; and furthermore, that 18 this contract is made upon the express condition 19 and with the express covenant that all rights 20 hereunder shall be subject to and controlled by the 21 Colorado River Compact and that the United States 22 and the Contractor shall observe and be subject to 23 and controlled by said Colorado River Compact and 24 Boulder Canyon Project Act in the construction, 25 management , and operation of Hoover Dam , 26 18 1 Lake Mead , canals and other works , and the 2 storage, diversion, delivery, and use of water 3 to be delivered to Contractor hereunder. 4 (iv) The right of the United States temporarily to 5 discontinue or reduce the amount of water to be 6 delivered hereunder whenever such discontinuance or 7 reduction is made necessary for purposes of 8 investigations , inspections , replacements , 9 maintenance, or repairs to any works whatsoever affecting, utilized or, in the opinion of the 10 Secretary, necessary for delivery of water 11 hereunder, it being understood that so far as 12 feasible the United States will (1) do so during 13 periods of low water demands and ( 2) give 14 reasonable notice in advance of such temporary 15 discontinuance or reduction. 16 (b) Delivery of Colorado River water by the United States 17 18 under this contract shall be charged to the State of Arizona' s apportionment 19 under the aforementioned Supreme Court Decree of March 9, 1964, in 20 Arizona v. California and will discharge to that extent the obligation of 21 the United States to deliver water under the aforementioned contract between 22 the United States and the State of Arizona, dated February 9, 1944. 23 8.4 Delivery Points . Colorado River water to be furnished 24 to the Contractor pursuant to this contract will be delivered by the 25 United States in the Colorado River at the point of diversion from 26 Lake Havasu where the intake structures of the Havasu Pumping Plant are 19 1 constructed. Agua Fria and Upper Gila River system waters will be 2 delivered to the Contractor at New Waddell and Buttes Dams, respectively. 3 Delivery points for other project water supplies and for return flows will 4 be determined by the Contracting Officer after consultation with the 5 Contractor and/or the affected subcontractor therefor. 6 8.5 Measurement. 7 (a) The quantity of Colorado River water pumped from 8 Lake Havasu for the project shall be measured by means of measuring devices 9 to be installed as part of the project works. If, for any reason, in the 10 opinion of the Secretary, said measuring devices shall fail to operate 11 satisfactorily, the Secretary will , from the best information available, 12 estimate the amount of water delivered to the Contractor. ( b) Deliveries of project water to the various 13 14 subcontractors shall be measured by means of measuring devices to be 15 installed as part of the project works at the points along the various 16 aqueducts at which such water may be diverted for each of said subcontractors, and/or at the points in the various reservoirs formed by the 17 dams constructed as part of the project works at which such water may be 18 19 diverted for subcontractors and/or at the points where return flow may be 20 delivered. These points of measurement will be established by the Secretary after consultation with Contractor and the affected subcontractor. If, for 21 any reason, in the opinion of the Secretary, said measuring devices shall 22 fail to operate satisfactorily, the Secretary will , from the best 23 24 information available and after consultation with the Contractor and the affected subcontractor, estimate the amount of water delivered to each such 25 26 subcontractor. The Secretary shall at all times have access over any lands 20 1 and rights-of-way of a subcontractor for the purpose of inspecting and 2 checking said measuring devices. 3 8.6 Responsibi 1 i ty for Distribution of Water after Leaving 4 Water Supply System. Whether or not the United States operates and 5 maintains the project facilities, the United States shall not be responsible 6 for the control , carriage, handling, use, disposal , or distribution of water 7 after said water has been diverted from the water supply system. At such 8 time as the Operating Agency assumes responsibility for the OM&R of project 9 works, the responsibility for diversion, carriage, and transportation of 10 the water through the water supply system shall be the sole responsibility 11 of the Operating Agency. Responsibility for distribution of water beyond 12 the water supply system shall be that of the subcontractors to whom said 13 water is delivered from the water supply system. The United States, its 14 officers, agents, and employees, shall not be liable for damage or claim of 15 damage of any nature whatsoever for which there is legal responsibility 16 arising out of or connected with the control , carriage, handling, use, disposal, or distribution of such water, and each subcontractor shall hold 17 the United States, its officers, agents, and employees, harmless from any 18 and all such claims. 19 • 8.7 Quantity of Water to be Delivered. 20 (a) The Secretary reserves the right to determine that 21 quantity of Colorado River water to be released each year from Lake Mead for 22 use by the Central Arizona Project pursuant to applicable law, which shall 23 24 include the quantity of water which may be allocated by the Secretary for 25 use on Indian lands. 26 (b) The quantity of Colorado River water available under 21 1 this contract for project purposes shall not exceed the quantity of water Z available to Arizona under the aforementioned Supreme Court Decree in 3 Arizona v. California and in Arizona' s water delivery contract with the 4 United States after first providing for satisfaction of: (i ) present perfected rights and perfected rights 5 described in Article I1(D) of the Decree and the 6 rights of other Federal reservations established 7 prior to September 30, 1968; Provided, however, 8 That the quantities of Colorado River water 9 10 reserved to satisfy the aforesaid rights shall not, except as provided in said Decree, be reduced 11 under any circumstances or for any reason what- 12 soever including, without limitation, a temporary 13 use permitted by the Secretary by other water users 14 in Arizona , California , or Nevada, of water 15 reserved pursuant to the foregoing but not 16 needed during any calendar year; And provided 17 further, That no rights to the recurrent use of 18 such water shall accrue by reason of said temporary 19 use; and 20 (ii) the quantities of water provided for in all 21 water delivery contracts between the United States 22 and water users in Arizona as of September 30, 23 1968. 24 (c) The quantity of Colorado River water available under 25 26 this contract for project purposes, including water for use on Indian lands 22 1 shall have the same priority as to delivery as the quantities of 2 Colorado River water delivered pursuant to water delivery contracts, 3 federal reservations of water, and other arrangements between the 4 United States and water users in Arizona entered into subsequent to 5 September 30, 1968, for use of Colorado River water on Federal , State or privately owned lands in Arizona in total quantities not to exceed 6 7 164, 652 acre—feet of diversions per year; Provided, however, That the 8 Contractor shall hold the United States, its officers, agents, employees, and successors or assigns, harmless as to anyand all claims for damages to 9 � 9 � 9 10 persons or to property direct or indirect and of whatever nature, arising 11 out of or which may in any manner be connected with the operation and/or 12 of fect of this Subarticle. (d) The limitation on contracting in Subarticle 8.7(c) above 13 14 shall not apply to contracts with holders of present perfected rights to 15 Colorado River water in Arizona or to the Secretary' s order of 16 November 24, 1982, reserving Colorado River water for the Cibola National 17 Wildlife Refuge. Nothing in Subarticle 8.7(c) shall restrict the right of 18 the Secretary under water service contracts referred to in said Subarticle 19 to terminate and/or reduce any entity' s entitlement to Colorado River water 20 and to make that entitlement available to other water users in Arizona. (e) During any year when the subcontractors cannot use any 21 portion of their entitlement to project water, and such water cannot be 22 23 ' resold or exchanged in accordance with the terms and conditions of the water 24 service subcontracts, the Contractor shall have the right in its discretion 25 to resell any or all of such water or to use any or all of such water for 26 ground water recharge purposes, including the subsequent recovery and resale 23 1 of such water, subject to Federal law, including but not limited to the 2 Reclamation Reform Act of 1982, State of Arizona law, and such rules and 3 regulations as the Secretary may deem appropriate. Subject to the terms and 4 conditions of water service subcontracts , the water orders of all 5 subcontractors shall be met before any project water is made available to 6 the Contractor under this provision. 7 8.8 Subcontracts. 8 (a) The United States shall be a party to subcontracts. 9 (b) The Secretary and the Contractor shall require in each 10 subcontract that: (i) unless and until otherwise provided by Congress, 11 water from the Central Arizona Project shall not 12 be made available directly or indirectly for the 13 irrigation of lands not having a recent irrigation 14 history, as determined by the Secretary, except in 15 the case of Indian lands , national wildlife 16 refuges, and, with the approval of the Secretary, 17 State-administered wildlife management areas; 18 (ii) there be in effect measures, adequate .in the 19 judgment of the Secretary and the Contractor, 20 to control expansion of irrigation. from aquifers 21 affected by irrigation in the Contractor' s service 22 area and to reduce pumping of ground water in the 23 agricultural subcontractors' service areas by the 24 amount of project water received by said 25 agricultural subcontractors; 26 24 1 (iii ) the canals and distribution systems through which 2 . water is conveyed after its delivery to the sub- 3 contractors shall be provided and maintained with 4 linings adequate in the Secretary' s judgment to 5 prevent excessive conveyance losses; 6 (iv) neither the Secretary, the Contractor nor any 7 subcontractor shall pump or permit others to pump 8 ground water from within the exterior boundaries of 9 the service area of a subcontractor receiving water from the Central Arizona Project for any use 10 outside of said subcontractor' s service area 11 unless the Secretary, the Contractor, and such 12 subcontractor shall agree, or shall have previously 13 agreed, that a surplus of ground water exists and 14 that drainage is or was required; 15 (v) except as otherwise agreed by the Contracting 16 Officer , neither the Contractor nor any 17 subcontractor shall sell or otherwise dispose of or 18 permit the sale or other disposition of any project 19 water, including return flows, for use outside the 20 Contractor' s service area; 21 (vi) irrigation water made available thereunder may 22 be made available by the Secretary for M&I purposes 23 if and to the extent that such water is no longer 24 required by the subcontractor for irrigation 25 purposes and shall be made available in all cases 26 25 1 where lands receiving project water have been 2 converted to municipal and industrial use; 3 Provided, however, That subcontracts effectuating 4 such transfers are subject to the approval of the 5 Secretary and the Contractor, which approval shall 6 not be withheld unreasonably; And provided further, 7 That it shall be deemed unreasonable for the 8 Secretary or the Contractor to withhold such 9 approval on the basis that the right to convert from irrigation to MI use for a specific 10 development could better be exercised in some other 11 subcontractor' s s-arvi ce area. The water so 12 converted from irrigation to M&I purposes will be 13 delivered with the same priority and at the same 14 rate per acre—foot as other M&I water. Likewise, 15 subcontracts for furnishing water for M&I I6 purposes, including, but not limited to, ground 17 water recharge to the extent ground water recharge 18 is consistent with Arizona law, shall provide that, 19 if water to be delivered thereunder is not 20 presently required for such purposes, such water 21 may be made available by the Secretary to other 22 users; Provided, further, That the subcontractor 23 shall be relieved of its payment obligation under 24 its subcontract only to the extent of the amount 25 paid by such other users; 26 26 1 (vii ) the acreage limitation provisions of Reclamation 2 Laws shall apply solely to agricultural water 3 service; 4 (viii ) except as specifically provided therein, it shall 5 be the provisions of this contract which shall be 6 controlling in the event of any inconsistency 7 between this contract and any subcontract; 8 ( ix) the subcontractor shall levy all necessary assess- .. 9 ments, tolls, and other charges and shall use all 10 of the authority and resources available to the 11 subcontractor to collect the same in order that the 12 subcontractor may meet its obligations thereunder 1 3 to make in full all payments required under said 14 subcontract on or before the date such payments 15 become due and to meet other obligations under the 16 1 subcontracts; 17 (x) the subcontractor establish, maintain, and provide 18 , the United States and the Contractor with land, 19 water use, and crop census records. 20 8.9 Shortages. As provided in Section 301(b) of the Basin 21 Project Act, Article II(B)(3) of the Decree of the Supreme Court of the 22 United States in Arizona v. California, 376 U.S. 340, dated March 9, 1964, 23 shall be so administered that in any year in which, as determined by the 24 Secretary, there is insufficient mainstream Colorado River water available 25 for release to satisfy the annual consumptive use of 7,500,000 acre-feet in 26 Arizona, California, and Nevada, diversions from the mainstream of the 27 1 Colorado River for the Central Arizona Project and for other uses in Arizona 2 under contracts or other agreements with the United States executed 3 subsequent to September 30 , 1968, shall be so limited as to assure 4 the availability of water in quantities sufficient to provide for 5 the aggreate annual consumptive use by holders of present perfected g 6 rights, by other users in the State of California served under contracts 7 existing as of September 30, 1968, with the United States by diversion works 8 heretofore constructed, and by other Federal reservations in California of 4,400,000 acre-feet of Colorado River water, and by users of the same 9 10 character in Arizona and Nevada. Water users- in the State of Nevada shall not be required to bear shortages in any proportion greater than would have 11 q 12 been imposed in the absence of said Section 301(b), nor shall said Section affect the relative priorities, among themselves, of water users in Arizona, 13 14 California, and Nevada which are senior to diversions for the Central 15 Arizona Project, or amend any provisions of said Decree. The aforesaid 16 limitation stated in Section 301(b) shall not apply so long as the Secretary shall determine and proclaim that means are available and 17 in operation which augment the water supply of the Colorado River system in 18 19 such quantity as to make sufficient Colorado River mainstream 20 water available for release to satisfy annual consumptive use of 7,500,000 acre-feet in Arizona, California, and Nevada. 21 8. 10 Rate of Diversions of Colorado River Water. Subject to 22 (a) the first proviso in Section 301(a) of the Basin Project Act, (b) the 23 24 provisions of Subarticle 10. 6(b) hereof, and (c) the provisions of 25 Subarticle 8.7(a) hereof, any capacity in the Granite Reef Aqueduct in 26 excess of 2,500 cubic feet per second may be utilized in the operations of 28 1 the project so as to maximize project benefits; Provided, however, That the 2 use of such capacity shall not result in the annual diversion of a quantity 3 of water in excess of the project' s legal entitlement under the Basin 4 Project Act. 5 8. 11 Priority in Case of Shortage. 6 (a) Subject to the provisions of Section 304(e) of the Basin 7 Project Act and the Secretary' s allocation decisions published in the 8 Federal Register on December 10, 1980, and March 24, 1983, any project water 9 as defined in Subarticle 5. 27(a) hereof, furnished through project 10 facilities shall , in the event of shortages thereof, be reduced pro rata 11 until exhausted, first for miscellaneous uses and next for agricultural 12 uses, before such project water furnished for M&I uses is reduced. 13 Thereafter, such project water for M&I uses will be reduced pro rata among 14 all M&I water users. Each subcontract or other water delivery arrangement 15 entered into pursuant to this contract shall so provide. This article shall 16 not apply to Indian uses; Provided, however, That the relative priorities 17 between Indian and non—Indian uses shall be as determined by the Secretary. 18 Notwithstanding the provisions of this Subarticle, . project water made 19 available as a result of construction and operation of modifications to 20 Roosevelt Dam as part of Plan 6 shall be distributed as provided in the 21 Plan 6 Funding Agreement, and shall not be subject to reduction in the event 22 of shortages of other project water supplies. (b) Any project water, as defined in Subarticles 5.27(b) , 23 24 (c) and (d) hereof, shall retain its priority relative to project water as 25 defined in Subarticle 5.27(a) hereof. 26 8. 12 No Guarantee of Availability of Water. The United States 29 1 assumes no responsibility with respect to the quantity of water available 2 pursuant fordelivery to this contract. In no event shall the 3 United States, its officers, agents, or employees, be liable for any 9 4 damages, direct or indirect, of whatsoever nature, arising out of or in any 5 wayconnected with any suspension or reduction in the delivery of water 6 pursuant to this contract or with any shortage in the quantity of water 7 available for delivery hereunder or to any subcontractor for any cause 8 whatsoever including, but not limited to, drought, delay in the construction 9 of the Navajo Project, the failure of the Navajo Project to be completed, or 10 the lack of power for pumping. 11 8. 13 Secretarial Control of Return Flow. (a) The Secretary reserves the right to capture all return 12 13 flow flowing from the exteri Or`"boundaries of the Contractor as a source of supply and for distribution to and use of the Central Arizona Project to the 14 pP 15 fullest extent practicable. The Secretary also reserves the right to capture for project use return flows within the boundaries of Contractor if 16 P in his judgment such return flow is not being put to a beneficial use. Any 17 18 subcontractor may sell its return flow; Provided, however, That except as otherwise agreed by the Contracting Officer, such return flow may not be 19 9 20 sold for use outside the Contractor' s exterior boundaries; And provided further, That if the price received for such return flow is higher than the 21 price paid for such project water, the amount of the excess price shall be 22 23 paid by such subcontractor to the Contractor for application against the 24 Contractor' s repayment obligation to the United States. (b) Any return flow captured by the United States and 25 26 determined by the Secretary to be suitable and available for use on lands 30 1 within the service area and/or by any subcontractor therein may be delivered 2 by the United States to a subcontractor as a part of the water supply for 3 which the subcontractor contracts hereunder and such water shall be 4 accounted and paid for pursuant to the provisions hereof. 5 8. 14 Water and Air Pollution Control . The Contractor, in 6 carrying out this contract, shall comply with all applicable water and air 7 pollution laws and regulations of the United States and the State of 8 Arizona, and shall obtain all required permits or licenses from the 9 appropriate Federal , State, or local authorities. 10 8. 15 Quality of Water. The operation and maintenance of 11 project facilities shall be performed in such manner as is practicable to 12 maintain the quality of project water made available through such 13 facilities at the highest level reasonably attainable as determined by the 14 Contracting Officer or the Operating Agency. Neither the United States nor 15 the Operating Agency warrants the quality of water and are under no 16 obligation to construct or furnish water treatment facilities to maintain 17 or better the quality of water. 18 8. 16 Exchange Water. Where the Secretary determines that a 19 subcontractor is physically able to receive Colorado River mainstream water in exchange for or in replacement of existing supplies of surface water from 20 i sources other than the Colorado River to provide water supplies for users 21 upstream from New Waddell , Modified Roosevelt and Buttes Dams, the 22 Secretary may require that said subcontractor agree to accept said 23 24 mainstream water in exchange for or in replacement of said existing supplies 25 { pursuant to the provisions of Section 304(d) of the Basin Project Act. 26 31 1 ' 1 8. 17 Rights Reserved to the United States to Have Water Carried 2 by Project'ect Facilities. As a condition to the construction of project 3 facilities and the delivery of water hereunder, the Contractor agrees that 4 all project facilities will be available for the diversion, transportation, 5 and carriage of water for Indian and non-Indian uses pursuant to arrangements or contracts therefor entered into on their behalf with the 6 g 7 Secretary. In the event the responsibility for the OM&R of project 8 facilities is transferred to and assumed by the Operating Agency, such 9 transfer shall be subject to the condition that the Operating -Agency shall 10 divert, transport, and carry such water for such uses pursuant to the 11 provisions of the aforesaid arrangements or contracts; Provided, however, 12 That the aforesaid arrangements or contracts will include provisions for the payment of applicable construction costs and OM&R costs in accordance with 13 14 Articles 9.3 and 9.6 of this contract. 8 . 18 Wheeling Non-Project Water . After taking into 15 _ 16 consideration the water delivery requirements of contracts for project water service and subject to availability of project capacity, non-project water 17 may be wheeled through project facilities pursuant to wheeling agreements 18 between the Contractor and the entity desiring to use project facilities for 19 wheeling purposes. All such agreements shall be subject to the approval of 20 the Contracting Officer who shall consider, among other things, the impact 21 that the wheeling of such non-project water will have on the quality of 22 project water. The Contractor and the Contracting Officer shall jointly 23 develop a standard form of wheeling agreement including the rate structure 24 for wheeling non-project water. All wheeling charges shall be paid to the 25 26 Contractor by the entity contracting for the wheeling of non-project water. 32 1 The Contractor shall be entitled to retain revenues from wheeling charges 2 sufficient to cover all OM&R costs associated with wheeling such non-project 3 water, plus an administrative charge to be jointly determined by the 4 Contractor and the Contracting Officer. All revenues from wheeling charges 5 in excess of the OM&R costs and administrative charges shall be remitted by 6 the Contractor to the Contracting Officer and deposited into the 7 Development Fund. 8 8. 19 Use of Project Power to Wheel Non-Project Water. If the 9 energy requirements necessary for the pumping of project water are met and 10 subject to the requirements of the Navajo Power Marketing Plan published in 11 the Federal Register on December 21, 1987, project power may be used to 12 wheel non-project water through project facilities under such conditions of 13 use, including amounts, times of use, losses, costs, and other conditions as 14 are established by the Contractor and approved by the Contracting Officer. 15 . 9. PAYMENT OF PROJECT COSTS ALLOCATED TO CONTRACTOR 9. 1 Allocation of Construction Costs. 16 (a) Upon completion of each construction stage, the 17 Contracting Officer will allocate costs to the various project purposes 18 using the separable costs-remaining benefits procedure. 19 • (b) For repayment purposes the reimbursable cost allocated 20 to irrigation and M&I water by the separable costs-remaining benefits 21. procedure will be combined and will hereinafter be termed the "water supply 22 23 allocation ." Upon completion of each construction stage, and at the 24 periodic intervals specified in Subarticle 9.3(d), suballocation of the water supply allocation will be made to the irrigation and M&I water 25 26 functions proportional to the water estimated to be used for each purpose 33 1 during the repayment period of each construction stage. The cost thus Z suballocated to the irrigation function will hereinafter be termed the 3 "interest-free allocation." The cost thus suballocated to the M&I water 4 function shall be added to the cost allocated to the commercial power 5 function, plus interest during construction for both, and the sum will 6 hereinafter be termed the "interest-bearing allocation." 7 (c) During construction, simple interest at the rate of 8 3.342 percent per annum shall be charged on costs allocated to the interest- 9 bearing function as adjusted by the Secretary (i.e. , net disbursements reduced bycontract holdbacks, revenues applied to construction cost, and 10 11 nonreimbursable expenses financed from construction funds). The total 12 amount of all interest thus accumulated through the construction period prior to the date of completion of each construction stage shall be added to 13 p 14 and become part of the actual construction cost of each construction stage. 15 Interest during construction shall not accrue during any period in 16 which construction is deferred or postponed by the United States as a result 17 of a national emergency, as determined by the -Secretary, if authority to 18 forego such interest exists or is made available to the Secretary. 9.2 Repayment Concepts. 19 (a) Costs suballocated to non-Indiai irrigation water will 20 be paid by the subcontractors to the Contractor on the basis of their 21 ability to pay as determined by the Secretary. 22 ( b) Costs allocated to commercial power and costs 23 24 suballocated to M&I water use shall be combined and repaid with interest at a rate of 3.342 percent per annum on the unpaid balance. 25 26 (c) Reimbursable costs allocated to recreation and fish 34 1 and wildlife are anticipated to be covered by a separate contract and repaid 2 by the beneficiaries thereof. 3 (d) Repayment of costs allocated to irrigation of Indian 4 lands shall be governed by the provisions of Section 402 of the 5 Basin Project Act. 6 (e) Repayment of the project will occur by construction 7 stages, with each stage having a separate 50-year repayment schedule. Upon 8 completion of each cost allocation study referred to in 9 Subarticle 9. 1(a) , subsequent to the initial study associated with the 10 first construction stage, the Contractor' s repayment obligation and the 11 obligation allocated to each construction stage will be adjusted based on 12 - the latest cost allocation study, and the Contractor will be provided with a 13 revised repayment schedule for the project and each construction stage. The 14 Contracting Officer will adjust previous principal and interest payments 15 made by the Contractor to reflect the new repayment schedule. For each 16 year where an adjustment in payments is necessary, there will be an over or 17 1 41 underpayment which will accrue with interest at the rate of 3.342 percent 18 per annum (compounded annually) to the adjustment date. If the adjustment 19 indicates that the Contractor overpaid principal and interest, the 20 Contractor shall be entitled to a credit against its next payments to the United States. Conversely, if the Contractor owes additional principal and 21 interest to the United States, such amount shall be paid to the United 22 States by the Contractor within 12 months of receipt of a statement therefor 23 24 from the Contracting Officer. The Contractor may use the repayment reserve 25 fund under Subarticle 10.3(b) hereof for any payment to the United States 26 required as a result of the above adjustment. 35 1 9. 3 Contractor' s Construction Cost Repayment Obligation. 2 (a) The Contractor' s repayment obligation shall consist of 3 the total cost allocated to the water supply and power functions plus OM&R in construction and interest during construction on costs allocated to 4 during the M&I water andower functions, but shall not include costs allocated to 5 p fish and wildlife and recreation,on, and costs associated with the delivery of 6 7 water to entities other than the Contractor or subcontractors. Such 8 entities shall include but not be limited to Indian tribes and councils in 9 central Arizona receiving project water and the New Mexico recipients of 10 water service from Hooker Dam or suitable alternative. The costs to be 11 excluded shall be calculated as follows: (i ) Costs excluded from the Contractor' s repayment 12 obligation for New Mexico water service shall be 13 determined by multiplying the project costs 14 allocated to the water supply function by the ratio 15 developed by dividing the quantity of project water 16 projected to be delivered throughout the overall 17 repayment period to water users in Arizona 18 in exchange for water delivered to users 19 in New Mexico from or by means of project 20 works , by the total quantity of Colorado River 21 water projected to be delivered by the project 22 throughout the overall repayment period. 23 (ii ) The amount of other project costs which shall 24 be excluded from the Contractor' s repayment 25 obligation shall be determined by multiplying the 26 36 1 project costs allocated to the water supply 2 function by a ratio developed by dividing the 3 quantity of project water projected to be delivered 4 throughout the overall repayment period to entities 5 other than the Contractor, the subcontractors, and 6 those users in New Mexico to whom water has been 7 made available through the construction of 8 Hooker Dam or suitable alternative by the 9 total quantity of project water projected to be 10 delivered throughout the overall repayment period; 11 Provided, That project water projected to be 12 delivered to such users will be computed based on 13 an assumption of full development not later than 14 the year 2005. (b) The costs determined under Subarticles 9.3(a)(i) and 15 16 (ii) above shall be subtracted from the water supply costs obtained from the 17 separable costs-remaining benefits procedure to determine the Contractor' s water supply costs. The Contracting Officer shall subal l ocate the 18 19 Contractor' s water supply costs to each of the construction stages based on 20 the ratios obtained by dividing the allocable cost of the construction stage by the allocable cost of the project (see Operation 1, Exhibit "A"). The 21 water supply costs assigned to each construction stage are then further 22 subal l ocated between irrigation and M&I water use in proportion to projected 23 total water deliveries to each function over the 50-year repayment period of 24 each construction stage (Operation 2, Exhibit "A"). The summarization of 25 26 the suballocations to each construction stage determines the total water 37 supply su ly cost to be assigned to irrigation and M&I water use (Operation 3, Z Exhibit "A") . To determine the Contractor' s repayment obligation, the 3 Contractor' s water supply suballocation to irrigation and M&I water uses, 4 and the power allocation from the separable costs-remaining benefits 5 procedure ,, shall each be adjusted for any revenues received by the 6 United States prior to the notice(s) of completion and for any contributions 7 received by the United States under the Plan 6 Funding Agreement for the 8 features constructed in that stage, and for the 500 cubic feet per second of 9 • incremental capacity in the Granite Reef Aqueduct and pumping plants (see 10 Article 9. 7) to determine the net amount of each function assigned to the 11 Contractor (Operation 4, Exhibit "A") . The Contractor' s repayment 12 obligation shall be the summation of the net amount for each function. 13 (c) Once the Contractor' s estimated or final repayment 14 obligation has been determined by the Contracting Officer, the obligation 1t shall be allocated to each construction stage based on the ratio obtained by 16 dividing the allocable cost of each construction stage by the allocable cost 17 of the project. Each construction stage will have a separate 50-year repayment period. The repayment obligation for each stage will be divided 18 P 19 into interest-bearing and interest-free components. The interest-free 20 component shall be the amount allocable to irrigation purposes for the 21 stage. The interest-bearing component will be the amount obtained by 22 subtracting the irrigation allocation for the stage from the obligation for 23 the stage. The principal payments for each stage shall be determined by 24 applying the percentages in Subarti cl a 9.3( f) to the repayment obligation 25 for each stage. The total payment for each stage for any year shall be 26 equal to the principal payment plus interest at the rate of 3.342 percent 38 1 per annum on the unpaid interest-bearing component of the repayment 2 obligation for each stage. For the water supply system, the portion of each 3 principal payment which is made by the Contractor from irrigation revenues 4 received by the Contractor each year will be used by the United States to 5 reduce the interest-free obligation. The remaining portion of the principal 6 payments made by the Contractor each year for the water supply system will 7 be used by the United States to reduce the interest-bearing obligation, and 8 once the interest-bearing obligation has been retired, the entire principal 9 payment made by the Contractor will be applied by the United States toward 10 the interest-free obligation. For the other construction stages, the entire 11 principal payment made by the Contractor each year for such stages will be 12 applied by the United States to reduce the interest-bearing obligation 13 first, and once such obligation has been retired, to reduce the interest- 14 free obligation. (d) At 7-year intervals following the determination of the 15 16 Contractor' s repayment obligation for the water supply system, or at more 1 7 frequent intervals if it becomes apparent to the Contracting Officer that a 18 significant change in water use has or will occur, until such time as the 1 9 interest-bearing obligation for each construction stage has been repaid, the 20 Contracting Officer will re-estimate the proportions of total water 21 deliveries to irrigation and M&I water use over the 50-year repayment period 22 for each stage. At such intervals, the Contracting Officer will adjust the 23 original interest-bearing and interest-free allocation for each stage based 24 on the new estimates and recalculate all preceding interest payments. 25 Differences between amounts owed and amounts paid by the Contractor shall be 26 adjusted by the Contracting Officer, who shall apply a credit against the 39 1 ' next payment due or notify the Contractor of the additional 1 Contractor s p y 2 amount due, as the case may be. All such adjustments shall include interest 3 at the rate of 3. 342 percentper er annum (compounded annually) . Any ents re uired from the Contractor shall be made within 4 additional paym q 5 12 months of the Contractor' s receipt of a statement from the Contracting 6 Officer therefor. The Contractor may use the repayment reserve fund under 7 Subarticle ( ) 10. 3 b hereof for any payment to the United States required as a 8 result of the above adjustment. (e) The Contracting Officer will notify the Contractor of 9 ( i )10 its estimated repayment obligation when construction of the first construction stage is substantially complete and upon completion of each 11 subsequent construction stage, and (ii ) the actual repayment obligation when 12 the final construction stage has been completed, as determined by the 13 Contracting ng Officer. In the event that the project ultimately consists only 14 of the water supply 1 system, New Waddell Dam, and Modified Roosevelt Dam, the Y 15 Contractor' s actual repayment obligation shall be limited to $2.0 billion. 16 If prior to completion of construction of such features the Contracting 17 Officer determines that the Contractor' s repayment obligation for such 18 features will exceed $2.0 billion, the Contracting Officer shall consult 19 with the Contractor and continuation of construction will be contingent upon 20 the execution of an amendatory contract to cover the increased repayment 21 obligation.ation. If construction of any other construction stage will result in 22 an increase in the Contractor' s repayment obligation by an amount equal to 23 or less than the respective amount identified in Exhibit "B," which is 24 attached hereto and made part of this contract, the Contractor' s repayment 25 ceiling may, the after consultation with the Contractor, be increased by 26 40 1 Contracting Officer by an amount equal to or less than the respective amount 2 identified i n Exhibit "8" by written notice thereof from the Contracting 3 Officer to the Contractor. If construction of such other construction 4 stage will result in an increase in the Contractor' s repayment obligation 5 by an amount greater than the respective amount identified in Exhibit "8," 6 the Contracting Officer shall consult with the Contractor and the 7 Contractor and the Contracting Officer shal 1 agree upon one of the 8 following courses of action prior to initiation of construction of such 9 construction stage: (1) that additional repayment ceiling be made available 10 from other construction stages, in which event the Contractor' s repayment 11 ceiling- will be increased to the agreed-to amount by written notice from 12 the Contracting Officer to the Contractor; or (2) that this contract be 13 renegotiated to increase the Contractor' s repayment ceiling; Provided, That 14 these courses of action shall also apply in the event that, prior to 15 completion of construction of such stage, the Contracting Officer determines 16 that the construction of such stage will result in an increase in the 17 Contractor' s repayment obligation by an amount greater than the respective 18 amount identified in Exhibit "B." (f) Annual percentages of the repayment obligation for each 19 20 construction stage shall be those set out in the following schedule or any revision thereof mutually agreed upon: 21 Percent of Repayment 22 Repayment Year Obligation (Annual) 1-7 - 1.0 23 8-14 1.3 15-21 1.6 24 22-28 2.0 29-35 2.6 25 36-42 2.7 43-49 2.7 26 50 2.7 41 1 (g) In the event that the Secretary contracts for delivery 2 of non-project water under the provisions of Article 10. 1, capital charges 3 associated with such delivery shall be calculated, charged, and utilized in 4 the same manner as capital charges deposited in the Development Fund 5 pursuant to Article 8. 18. 6 9. 4 Payment of Contractor' s Construction Cost Repayment 7 Obligation. 8 (a) The Contractor shall make annual payments to the 9 United States, to be credited to the Development Fund, which shall be 10 sufficient, when combined with accruals from the other sources described in 11 Section 403(f) of the Basin Project Act, the Hoover Power Plant Act of 1984, 12 and other miscellaneous revenues, including but not limited to net wheeling 13 charges, to effect repayment of the repayment obligation for each 14 construction stage within a period of not more than 50 years beginning with 15 the year following substantial completion of each construction stage. The 16 Contractor' s first payment shall be due on or before January 15 of the year 17 following the year in which the Secretary announces the substantial 18 completion of each construction stage. Annual payments thereafter shall 19 be due on or before January 15 of each following year. • (b) The Contractor agrees to make annual payments 20 calculated by the Secretary as follows: 21 (i) Calculate the annual principal payments required by 22 the schedule in Subarti cl a 9. 3( f) or any revision 23 thereof for each construction stage. 24 (ii) Add to ( i) the annual interest, at 3.342 percent, 25 on the unpaid balance of the interest-bearing 26 42 1 allocation for each construction stage. 2 (iii ) Determine the total amount of all interest and 3 principal payments due for all construction 4 stages. 5 (iv) Subtract therefrom the revenues estimated to be 6 available from the Development Fund anticipating 7 a zero balance at the end of each year in the 8 Development Fund. (v) Make adjustments for differences between estimated 9 and actual revenues for the preceding year. 10 (c) On or before each December 15 , beginning with 11 12 December 15 of the year in which the Secretary notifies the Contractor of 13 the substantial completion of the first construction stage, the Secretary 14 will notify the Contractor of the amount of the annual payment due on the 15 following January 15, which has been determined by the Secretary on the 16 basis of the aforesaid calculation. (d) The Contractor may make additional payments on the 17 18 repayment obligation at any time subject to such terms and conditions as may 19 be agreed upon by the Contractor and the Contracting Officer; Provided, 20 however, That all interest due is paid at the same time, whereupon appropriate adjustments in the schedule of future payments will be made by 21 the Secretary, who shall as promptly as possible give the Contractor 22 written notice of the adjusted repayment schedule. 23 (e) It is understood and agreed that the Contractor shall 24 be obligated for the payments set forth in Subarticle 9. 4(a) hereof and 25 that regardless of the delinquency or default in payment of any charges 26 43 1 due to the Contractor from any subcontractor, or a diminution in the water 2 supply- available to the Contractor, or regardless of any other reason, the 3 Contractor shall complete repayment of each construction stage within a 4 50—year period od be9innin9 in the year following the announcement by the 5 Secretary of substantial completion of such construction stage. 6 9. 5 Commercial Power Rates. The Secretary will , consistent 7 with th aPPlicabla law, periodically review and provide for appropriate 8 � adjustments in the rates established for the sales of power and energy, 9 revenues from which contribute to the Development Fund. 9.6 Other Costs Borne by the Contractor. 10 (a) In addition to the payments provided for in Article 9.4 11 hereof, and subject to the provisions of Subarticle 9.6(d) hereof, during 12 such periods as the United States operates and maintains completed 13 p construction stages, the Contractor shall make advance payments for 14 15 OM&R costs incurred by the United States. The United States will furnish the Contractor with an estimate in writing at least 6 months 16 17 prior to substantial completion of construction of the water supply system, 18 of the OM&R cost due from the Contractor to the end of the then current , together with an estimate of such cost for the calendar year 19 9 immediatelyfollowing. Within a reasonable time of the receipt of said 20 estimates, as determined by the Contracting Officer, the Contractor shall 21 advance to the United States the payments for the estimated OM&R cost to the 22 end of the then current year and without further notice or demand shall on 23 December 15 of the then current year and on June 15 of the following year 24 advance to the United States in equal semiannual installments the 25 Contractor' s share of the estimated cost, including supervision and 26 44 1 administrative expense for the OM&R of the water supply system. Advance Z payments shall be made in subsequent years by the Contractor to the 3 United States on the basis of estimates to be furnished by the United States 4 on or before November 15 preceding said subsequent year and the advances of 5 said payments shall be due and payable in equal semiannual payments on the 6 following December 15 and June 15. Said OM&R costs are the total annual 7 OM&R costs of completed construction stages which are allocated to the 8 irrigation and M&I water supply functions less (i) the costs described in Subarti cl e 9. 6(c) hereof, and (Ii) an amount determined by multiplying the 10 total of said annual costs by the ratio obtained by dividing the estimated 11 amount of project water projected to be delivered in the subsequent year to 12 entities other than the Contractor, the subcontractors, and those entities 13 in New Mexico to which project water will be made available from Hooker Dam 14 or suitable alternative, by the total amount of project water estimated to 15 be delivered for use in that year. (b) Differences between actual OM&R costs and the estimated 16 17 costs shall be determined by the Contracting Officer and shall be adjusted 18 in next succeeding estimates; Provided, however, That if in the opinion of the Contracting Officer the amounts advanced by the Contractor for any year 19 20 are likely to be insufficient to pay the above-mentioned OM&R costs during such year, additional and sufficient sums of money shall be paid forthwith 21 by the Contractor to the United States upon notice thereof and demand 22 therefor by the Contracting Officer; Provided, further, That the 23 United States will give Contractor reasonable notice in advance of any such 24 deficiency. 25 (c) The Contractor' s obligation to pay said OM&R costs 26 45 1 of completed construction stages will be reduced to the extent that project 2 water is made available for use in New Mexico following completion of 3 Hooker Dam or suitable alternative. Said reduction will be in the 4 proportion which the quantity of project water projected to be delivered to 5 water users in Arizona, in exchange for Gila River system waters delivered 6 to water users in New Mexico from or by means of project works, bears to the 7 total quantity of Colorado River water projected to be delivered to the 8 project that year. 9 (d) In the event that responsibility for OM&R of project 10 facilities is transferred to and assumed by the Contractor, the Contractor 11 shall be relieved of the obligation to make OM&R payments associated with 12 such facilities under Subarticle 9.6(a) of this contract. In that event, 13 the United States shall pay or provide for payment of OM&R costs associated 14 with delivery of water to entities other than the Contractor and the 15 subcontractors . Such costs shall be computed in accordance with 16 Subarticle 9. 6(a) of this contract. If the Contractor does not receive 17 payment in advance for such costs, the Contractor shall have no obligation 18 to deliver such water. (e) During the Hoover Dam cost-repayment period, the 19 Contractor shall pay to the United States the sum of $0.25 for each acre- 20 foot of water pumped from Lake Havasu for miscellaneous and M&I water 21 asdetermined bythe Contracting Officer. The quantity of water purposes 22 pumped for such purposes will be determined by the Contracting Officer at 23 the end of each calendar year and the Contractor notified of the amount due 24 by March 1 of each subsequent year. Payment shall be due on May 1 following 25 notification. Said payment shall be credited to the Colorado River Dam Fund 26 46 1 established by Section 2 of the Boulder Canyon Project Act. 2 9. 7 Repayment of Costs of Excess Capacity in Granite Reef 3 Aqueduct. The costs of providing any capacity in the Granite Reef Aqueduct and pumping plants in excess of 2,500 cubic feet per second shall be repaid 5 by Contractor from funds available to Arizona pursuant to the provisions of 6 Section 403(f) of the Basin Project Act, or by funds from sources other than 7 the Development Fund. 8 9.8 Ad Valorem Taxes, Assessments, Tolls, and Other Charges. 9 Within the legal limits available to it, the Contractor shall levy 10 ad valorem taxes upon the taxable property within the service area of the 11 Contractor at rates determined necessary by the Contractor to raise funds 12 which, together with the revenues from the sale of water and such financial 13 assistance from the Development Fund as the Secretary determines is 14 available therefor, are sufficient to meet the obligations of the Contractor 15 to make in full all payments to the United States on or before the date such 16 payments become due and to meet its other obligations under this contract. 17 9.9 Continuation of Payments After Project Payout. Following 18 payment to the United States of the Contractor' s final payment for the last 19 construction stage, the Contractor shall continue. to make annual payments to 20 the United States to be credited to the Development Fund in amounts .equal to 21 the average annual principal payment for the project during the overall 22 repayment period. In the event that no augmentation project, as 23 contemplated in the Basin Project Act, has been authorized or is under 24 active consideration by the Congress at the time project construction costs 25 have been repaid in full , payments under this formula will be not required; 26 Provided, however, That payments will commence after repayment of the 47 1 project costs pursuant to the formula, or any adjustment thereof agreed to by the parties, at such time as an augmentation project is authorized by 3 Congress and the costs thereof allocated to the Contractor are determined by 4 the Secretary. 5 9.10 Defaults. 6 (a) The Contractor shall pay a penalty on payments , installments or charges which become delinquent, computed at the rate of � per month on the amount of such delinquent payments, installments, 8 1 percent charges from and after the date when the same become due until paid. 9 or c (b) No water shall be furnished to the Contractor during 10 11 any period in which the Contractor may be in arrears more than 12 months in thea ments to the United States required by Article 9.4 hereof. 12 p y (c) All rights of action for breach of this contract are 13 14 reserved to the United States as provided by Federal law. 10. GENERAL PROVISIONS 15 10. 1 Other Contracts. The Secretary reserves the right to 16 contract arectly with other water using entities concerning water supply 17 through project ro ect facilities. In the event this occurs, the provisions of 18 19 Article 8. 17 hereof shall be applicable. 10.2 Title to Project Works. Title to all water supply system 20 works and all project facilities constructed pursuant to the Basin Project 21 Act and this contract shall be and remain in the United States until 22 otherwise provided by Congress. 23 10.3 Reserve Funds. 24 (a) Commencing with notice of transfer of OM&R for the . 25 Granite Reef Aqueduct, including the Havasu Pumping Plant, the Contractor 26 48 1 shall accumulate and maintain an emergency OM&R reserve fund, which the 2 Contractor shall keep available to meet costs incurred during periods of 3 interruption of water service. 4 ( ii ) The Contractor shall accumulate the reserve fund 5 with annual deposits, including interest and dividends accruing to fund 6 balances or holdings, of not less than $400,000 in any year in which the 7 fund balance is less than $4,000,000. The fund shall be invested in a 8 Federally insured interest- or dividend-bearing account, or in securities 9 guaranteed by the Federal Government; Provided, That money in the reserve 10 fund shall be available within a reasonable time to meet expenses for such 11 purposes as those identified in Subarticle 10.3(a)(iv) hereof. Such annual 12 deposits and the accumulation of interest and dividends to the reserve fund 13 shall continue until $4,000,000 is accumulated. Interest and dividends accruing to fund balances shall be added to the fund in any year when the 14 fund balance is greater than $4,000,000; Provided, That in no event shall 15 the fund be increased to an amount greater than the actual amount of fixed 16 17 OMR costs for the preceding year as mutually determined by the Contractor 18 and the Contracting Officer. Any balance in the fund in excess of the 19 amount of fixed OM&R costs for the previous year shall be considered to be 20 the general funds of the Contractor and available for use as such. (iii ) Upon mutual agreement between the Contractor and 21 the Contracting Officer, the amount to be accumulated and maintained in the 22 reserve fund provided . for in this Subarticle may be adjusted in 23 consideration of the risk and uncertainty stemming from the size and 24 complexity of the project, the size of the annual ' OM&R budget, additions 25 . to, deletions from, or changes in project works, or OM&R costs not 26 49 1 contemplated when this contract was executed. Z ( iv) The Contractor may make expenditures from such 3 reserveonlymeeting fund for unforeseen and extraordinary operation and Hance costs unusual or extraordinary repair or replacement costs, and 4 mainte , 5 betterment costs (in situations where recurrence of severe operation and 6 maintenance problems can be avoided or eliminated). Proposed expenditures 7 from the fund shall be submitted to the Contracting Officer in writing for 8 review and written approval prior to disbursement. (v) During any period in which any of the project works 9 . are operated and maintained by the United States, the reserve fund shall be 10 P 11 available for like use by the United States. (vi) On or before February 1 of each year, the 12 13 Contractor shall provide to the Contracting Officer an annual statement indicating the principal and accumulated interest in the emergency OM&R 14 reserve fund as of December 31 of the preceding year. 15 (b) No later than 1 year following the Contractor' s 16 last construction advance under the Plan 6 Funding Agreement, the Contractor 17 18 shall accumulate and maintain a repayment reserve fund to help assure payments to the United States under this contract. . 19 ( ii ) The Contractor shall accumulate such reserve fund 20 with annual deposits, including interest and dividends accruing to fund 21 balances or holdings, of not less than $4,000,000 in any year in which the 22 fund balance is less than $40,000,000. The fund shall be invested in a 23 Federally insured interest- or dividend-bearing account, or in securities 24 25 guaranteed by the Federal Government; Provided, That money in the reserve fund shall be available within a reasonable time to meet expenses for the 26 50 1 purpose for which it was established. Such annual deposits and the 2 accumulation of interest to the reserve fund shall continue until 3 $40 , 000 ,000 is accumulated . Any balance in the fund in excess of 4 $40,000,000 shall be considered to be the general funds of the Contractor 5 and available for use as such. 6 (iii) Upon mutual agreement between the Contractor and 7 the Contracting Officer, the amount to be accumulated and maintained in the 8 reserve fund provided for in this Subarticle may be adjusted. 9 (iv) Proposed expenditures from the fund shall be 10 submitted to the Contracting Officer in writing for review and written 11 approval prior to disbursement. 12 (v) On or before February 1 of each year, the 13 Contractor shall provide to the Contracting Officer an annual statement of 14 the principal and accumulated interest in the repayment reserve fund as of 15 December 31 of the preceding year. 10. 4 Recreational Use of Water Facilities. 16 (a) The enhancement of recreational opportunities in 17 18 connection with the project works authorized pursuant to Title III of the 19 Basin Project Act shall be in accordance with the provisions of the federal 20 Water Project Recreation Act, 79 Stat. 213, dated July 9, 1965, except as provided in Subarticle 10.4(b) hereof. 21 (b) Recreational development at Orme Dam and Reservoir 22 23 shall be governed by the provisions of Section 302(d) of the Basin Project 24 Act. 10. 5 Confirmation of Contract. 25 (a) The Contractor, after the execution of this contract, 26 51 1 shall promptly seek to secure a decree of a court of competent jurisdiction Z of the State of Arizona confirming the execution of this contract. The 3 Contractor shall furnish the United States a certified copy of the final 4 decree, the validation proceedings, and all pertinent supporting records of 5 the court approving and confirming this contract, and decreeing and 6 adjudging it to be lawful , valid, and binding on the Contractor. This 7 contract shall not be binding on the United States or the Contractor until 8 such final decree has been entered. (b) This contract shall be indivisible for purposes of 10 validation and shall not be binding on the United States or the Contractor 11 unless validated pursuant to the provisions of Subarti cl a 10.5(a) hereof in 12 each and all of its terms and conditions. 13 10.6 Rules, Regulations, and Determinations. (a) The parties agree that the delivery of water or the use 14 15 of Federal facilities pursuant to this contract is subject to Reclamation Law, as amended and supplemented, and the rules and regulations promulgated 16 by the Secretary of the Interior under Reclamation Law. 17 (b) The Contracting Officer, after an opportunity has 18 been offered to the Contractor for consultation, shall have the right to 19 make rules, regulations, and determinations consistent with the provisions 20 of this contract, the laws of the United States and the State of Arizona, 21 including, without limitation, rules, regulations, and determinations 22 relative to maximizing project benefits from pumping from Lake Havasu, the 23 rate and schedule of pumping therefrom and the rate and schedule of pumping 24 at the Granite Reef pumping plants, to add to or modify said rules, 25 26 regulations, and determinations as may be deemed proper and necessary to 52 1 carry out this contract , and to supply necessary details of its 2 administration which are not covered by express provisions of this contract. 3 The Contractor and each subcontractor shall observe such rules, regulations, 4 and determinations and each subcontract shall so provide. 5 (c) Where the terms of this contract provide for action 6 to be based upon the opinion or determination of either party to this 7 contract, whether or not stated to be conclusive, said terms shall not be 8 construed as permitting such action to be predicated upon arbitrary, 9 capricious, or unreasonable opinions or determinations. In the event that 10 the Contractor questions any factual determination made by the 11 Contracting Officer, the findings as to the facts shall be made by the 12 Secretary only after consultation with the Contractor and shall be 13 conclusive upon the parties. 14 10.7 Books, Records, and Reports. The Contractor shall establish 15 and maintain accounts and other books and records pertaining to 16 administration of the terms and conditions of this contract, including: the Contractor' s financial transactions, water supply data, project operation, 17 18 maintenance and replacement logs, project land and right-of-way use agreements, and other matters specifically relating to this contract that 19 the Contracting Officer may require. Reports thereon shall be furnished to 20 ' the Contracting Officer in such form and on such date or dates as the 21 Contracting Officer may require. Subject to applicable Federal laws and 22 _ regulations, each party to this contract shall have the right during office 23 hours to examine and make copies of the other party' s books and records 24 relating to matters covered by this contract. 25 10.8 Notices. Any notice, demand, or request authorized or 26 53 1 required by this contract shall be deemed to have been given, on behalf of 2 the Contractor, when mailed, postage prepaid, or delivered to the Regional 3 Director, Lower Colorado Region, Bureau of Reclamation, P.O. Box 61470, 4 Boulder City, Nevada 89006 , and on behalf of the United States, when mailed, 5 postage prepaid, or delivered to the General Manager of the Contractor, 6 23636 North 7th Street, Phoenix, Arizona 85024. The designation of the 7 addressee or the address may be changed by notice given in the same manner 8 as provided in this article for other notices. 9 10. 9 Contingent on Appropriation or Allotment of Funds. T h e 10 expenditure or advance of any money or the performance of any obligation by 11 the United States under this contract shall be contingent upon 12 appropriation or allotment of funds. Absence of appropriation or allotment 13 of funds shall not relieve the Contractor from any obligations under this 14 contract. No liability shall accrue to the United States in case funds are 15 not appropriated or allotted. 16 10. 10 Changes in Contractor' s Organization. While this contract 17 is in effect, no change shall be made in the Contractor' s organization, 18 by exclusion of lands, by dissolution, consolidation, merger or otherwise, except upon the Contracting Officer' s written consent; Provided, however, _ 19 That approval is hereby given to the inclusion of other counties as part of 20 Contractor' s service area, except, however, that the United States shall not 21 be required, under this contract, to construct project facilities to serve 22._ lands within said additional counties. 23 10. 11 Assignment Limited--Successors and Assigns Obligated. 24 The provisions of this contract shall apply to and bind the successors and 25 assigns of the parties hereto, but no assignment or transfer of this 26 54 1 contract or any part or interest therein shall be valid until approved in 2 writing by the Contracting Officer. 3 10. 12 Judicial Remedies Not Foreclosed. Nothing herein shall 4 be construed (a) as depriving either party from pursuing and prosecuting any 5 remedy in any appropriate court of the United States or the State of Arizona 6 which would otherwise be available to such parties even though provisions 7 herein may declare that determinations or decisions of the Secretary or 8 other persons are conclusive or (b) as depriving either party of any defense 9 thereto which would otherwise be available. 10 10. 13 Equal Opportunity. During the performance of this 1 1 contract, the Contractor agrees as follows: 12 (a) The Contractor will not discriminate against any 13 employee or applicant for employment because of race, color, religion, sex, 14 or national origin. The Contractor will take affirmative action to ensure 15 that applicants are employed, and that employees are treated during 16 employment, without regard to their race, color, religion, sex, or national 17 origin. Such action shall include, but not be limited to, the following: 18 Employment, upgrading, demotion, or transfer; recruitment or recruitment 19 advertising; layoff or termination; rates of pay or other forms of 20 compensation; and selection for training, including apprenticeship. The 21 Contractor agrees to post in conspicuous places, available to employees and 22 applicants for employment, notices to be provided by the Contracting Officer 23 setting forth the provisions of this Equal Opportunity clause. (b) The Contractor will , in all solicitations or 24 25 advertisements for employees placed by or on behalf of the Contractor, state 26 that all qualified applicants will receive consideration for employment 55 1 without regard to race, color, religion, sex, or national origin. 2 (c) The Contractor will send to each labor union or representative of workers with which it has a collective bargaining 3 4 agreement or other contract or understanding, a notice, to be provided by the ContractingOfficer, advising the labor union or workers' representative 5 6 of the Contractor' s commitments under this Equal Opportunity clause, and 7 shall post copies of the notice in conspicuous places available to employees 8 and applicants for employment. (d) The Contractor will comply with all provisions of 9 10 Executive Order No. 11246 of September 24, 1965, as amended, and of the 11 rules, regulations, and relevant orders of the Secretary of Labor. (e) The Contractor shall furnish all information and • 12 reportsrequiredby said amended Executive Order and by the rules, 13 regulations, and orders of the Secretary of Labor, or pursuant thereto, and 14 will permit access to its. books , records , and accounts by the 15 Contracting Officer and the Secretary of Labor for purposes of investigation 16 to ascertain compliance with such rules, regulations, and orders. 17 (f) In the event of the Contractor' s noncompliance with the 18 Equal Opportunity clause of this contract or with any of the said rules, 19 q regulations , or orders, this contract may be canceled, terminated, or 20 suspended , in whole or in part, and the Contractor may be declared 21 p ineligible for further Government contracts in accordance with procedures 22 authorized in said amended Executive Order, and such other sanctions may be 23 imposed and remedies invoked as provided in said amended Executive Order, or 24 by rule, reg.lation, or order of the Secretary of Labor, or as otherwise 25 provided by law. 26 56 1 (g) The Contractor will include the provisions of paragraphs 2 (a) through (g) in every subcontract or purchase order unless exempted by 3 rules, regulations, or orders of the Secretary of Labor issued pursuant to 4 Section 204 of said amended Executive Order, so that such provisions will be 5 binding upon each subcontractor or vendor. The Contractor will take such 6 action with respect to any subcontract or purchase order as the Contracting Officer may direct as a means of enforcing such provisions, 8 including sanctions for noncompliance; Provided, however, That in the event 9 the Contractor becomes involved in, or is threatened with, litigation with a 10 subcontractor or vendor as a result of such direction by the 11 Contracting Officer, the Contractor may request the United States to enter 12 into such litigation to protect the interests of the United States. 10. 14 Compliance With Civil Rights Laws and Regulations. 13 (a) The Contractor shall comply with Title VI of the 14 15 Civil Rights Act of 1964 (42 U. S . C. 2000d) , Section 504 of the 16 Rehabilitation Act of 1975 ( Public Law 93-112, as amended) , the 17 Age Discrimination Act of 1975 (42 U.S.C. 6101, et seg. ) and any other applicable civil rights laws, as well as with their respective . implementing 18 regulations and guidelines imposed by the U.S. Department of the Interior 19 and/or Bureau of Reclamation. 20 (b) These statutes require that no person in the United 21 States shall , on the grounds of race, color, national origin, handicap, or 22 age, be excluded from participation in, be denied the benefits of, or be 23 24 otherwise subjected to discrimination under any program or activity 25 receiving financial assistance from the Bureau of Reclamation. By executing 26 this contract, the Contractor agrees to immediately take any measures 57 1 necessary to implement this obligation, including permitting officials of 2 the United States to inspect premises, programs, and documents. 3 (c) The Contractor makes this agreement in consideration of 4 and for the purpose of obtaining any and all Federal grants, loans, 5 contracts, property discounts or other Federal financial assistance extended 6 after the date hereof to the Contractor by the Bureau of Reclamation, 7 including installment payments after such date on account of arrangements 8 for Federal financial assistance which were approved before such date. The 9 Contractor recognizes and agrees that such Federal assistance will be 10 extended in reliance on the representations and agreements made in this 11 article, and that the United States reserves the right to seek judicial 12 enforcement thereof. 13 10. 15 Officials Not io Benefit. No Member of or Delegate to 14 Congress, Resident Commissioner or official of the Contractor shall benefit 15 from this contract other than as a water user or landowner in the same manner as other water users- or landowners. 16 11. STATUS OF DECEMBER 15, 1972 CONTRACT 17 Upon judicial confirmation of this contract, the December 15, 1972 18 contract entitled "Contract Between the United States and the Central 19 Arizona Water Conservation District For Delivery of Water and Repayment of 20 Costs of the Central Arizona Project" (Contract No. 14-06-W-245) , shall be 21 superseded and replaced by this contract. 22 23 24 25 26 58 1 IN WITNESS WHEREOF, the. parties hereto have caused this contract Z to be executed the day and year first above written. 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W o CO C CU 0 1r 0 w w•� b CO C4 C 4.io E 1C 0 0 a E-+ L4 u CENTRAL ARIZONA PROJECT P.O. Box 43020• Phoenix,Arizona 85080-3020 • 23636 North Seventh Street (85024) p (623) 869-2333 • www.cap-az.com September 14, 1999 Mr. Chuck Sweet Town Manager Town of Oro Valley 11000 N. La Canada Drive Oro Valley, Arizona 85737 Subject: Central Arizona Project Incentive Recharge Contract Dear Mr. Sweet: Enclosed for execution on behalf of the Town of Oro Valley (the "Town") are two duplicate originals of an agreement("Agreement") between the Central Arizona Water Conservation District ("CAWCD") and the Town for the delivery of Central Arizona Project ("CAP") incentive recharge water. Please have each of the enclosed Agreements executed by the authorized officials of the Town and return both copies of the Agreement, together with a certified copy of an appropriate resolution approving the Agreement and authorizing its execution. Do not date the Agreement. CAWCD will fill in the date when the Agreement is executed on behalf of CAWCD. The water supply to be furnished under the enclosed Agreement is incentive recharge CAP water, or, in other words, CAP water which is determined by CAWCD to be available in any year after the water orders of all CAP subcontractors and CAP Indian contractors have been satisfied. The price for incentive recharge water service for 2000 is $44.00 per acre- foot. Article 9(a) of the enclosed Agreement requires that the Town submit a written water delivery schedule to CAWCD showing the quantity of incentive recharge water it desires for the calendar year 2000. Please submit this schedule when you return the enclosed Agreement to CAWCD. Upon receipt of this schedule, CAWCD will review your water order to determine if we can satisfy your request. CAWCD will make any amendments to your requested schedule that it deems necessary or appropriate. After this review process CAWCD will furnish the Town a water delivery schedule for the calendar year 2000. Mr. Chuck Sweet September 14, 1999 Page 2 You may contact me at 623-869-2368 if you have any questions about the enclosed Agreement or the process outlined in this letter. Very truly yours, }//-461-a-)461./w,a-rnc:24 ..) Sheila A. Brennemann Paralegal Io\incentive\Itr\sweet Enclosures cc: Larry Dozier, CAWCD Jodi Gould, CAWCD Tina Brown, CAWCD i 2 TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: November 17, 1999 TO: HONORABLE MAYOR& COUNCIL FROM: Melissa Shaw, AICP, Planner II SUBJECT: PREPARATION FOR CENSUS 2000: AN ACTION PLAN FOR ORO VALLEY BACKGROUND: The United States decennial census will officially commence on April 1, 2000. Required by the U.S. Constitution to be taken every 10 years, the importance of achieving an accurate census count is evident considering that Congressional districts boundaries are drawn and Federal revenue is distributed based on a jurisdiction's census population count. Titled "Census 2000", the Census Bureau has launched the largest public information campaign in the history of the census in order to promote the most complete and accurate population count in the decennial census. Part of this campaign is designed to involve local levels of government by actively informing their citizens of the timing and importance of the census. The census is crucially important to Oro Valley because of the Town's high annual growth rate, subsequent population changes and the revenue distributed based on population. Because the rate of change has been so rapid, the Town was able to justify the expense of participating in the special 1995 five year census. Simply put, for every person "missed", or not counted by the census, the Town will lose approximately $300 per year over the next 10 years in state-shared revenue. In Oro Valley, preparations for the census began in early 1999, starting with participation in the Census Bureau's LUCA (Local Update of Census Addresses) program. The Town will cooperate with the Census Bureau by participating in all of the Bureau's address and map update programs. In addition, the Town is a member of Pima Association of Governments (PAG) Complete Count Committee (CCC), a regional effort to publicize and promote the census' main message: "Be Counted". The CCC consists of a main committee and five subcommittees. PAG has prepared a document called "Pima County Census 2000 Campaign" which lists all the strategies and schedule of activities the CCC will undertake. Similarly, the proposed Oro Valley Action Plan contains strategies specific to the Town to promote support and awareness of the Census with our residents. Achieving an accurate decennial census count in 2000 is the purpose behind the proposed action plan. SUMMARY: Oro Valley is unique among the CCC members in that the focus of our census efforts is to minimize the undercount of seasonal residents, in contrast to the traditionally undercounted minority populations. The action plan prepared by Staff includes three alternative levels of commitment, from lowest to highest, with each level cumulative, based on the time and funding required to implement each. The lowest level of commitment includes evaluating all Census Bureau sponsored address list and maps, and boundary change reviews. The Town must take the opportunity to correct the address lists and corresponding maps the Bureau will use to mail out the census forms. This level also includes limited public information strategies. The moderate and highest levels of commitment contain increasing requirements for involvement in terms of staff time, resources and funding. Although many actions are listed, the action plan is not all-inclusive and can be modified as necessary. Also, as actions were prioritized, not all were recommended for implementation. TOWN OF ORO VALLEY COUNCIL COMMUNICATION Page 2 of 2 Planning staff presented the action plan to department heads on November 4th for review of the activities and assigned responsibility. The department heads agreed to implement the highest level of commitment, pending Council review. If the Council agrees that this course of action is the best for the Town, additional funding and resources, especially staff, will be required in order to implement the strategies. The action plan details the action or strategy, responsible staff, implementation and completion dates, current status, approximate staff time commitment, volunteer and hired personnel hours, and an estimated cost and whether or not we recommend the activity. Full implementation requires over 400 hours of committed time. A key to the success of full implementation is hiring temporary and consultant assistance particularly in regards to Public Relations. The cost to hire a consultant is included in the action plan. FISCAL IMPACT The total cost of the project ($15,050) is proposed to be provided by the Council Contingency Fund. This amount will be more than balanced over the next ten years if the Town is successful in counting just five more persons as residents. RECOMMENDATION: Planning staff recommends that the Town Council adopt the Preparation for Census 2000 Action Plan's highest level of commitment, and the staff-recommended actions, and approve the necessary funding. SUGGESTED MOTION: The Oro Valley Town Council may wish to consider one of the following motions: I move to adopt the Preparation for Census 2000 Action Plan's highest (medium or lowest) level of commitment and the staff-recommended actions, and approve the necessary funding from the Council Contingency Fund. OR I move to adopt the Preparation for Census 2000 Action Plan's highest (medium or lowest) level of commitment and the staff-recommended actions, and approve the necessary funding from the Council Contingency Fund, with the following revisions: OR I do not support adoption of the Preparation for Census 2000 Action Plan, finding that: ATTACHMENT: 1. Census 2000 Action Plan. k 1 Planning .,�: Zoni . dministrator F:�INDIVID/MJS/census/action plan town council report Co •."u 'Ity Developme Oirector -Ad A AAA Town Manager CO CO �1 O) 07 .A W N -i _= D '_ O D v 0 vo (Do O0D — c < � caO coS O 0 3 Goco � 0 Ox � o ' � a3 =. Q-2 Q 3 x ci) `< o . 3 ,D m y cD N CN Q. 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Retirement Community for $850 Donation to Coyote Run SUMMARY: On October 15, 1999 Desert Point Retirement Community at La Reserve celebrated their 1st anniversary as a Leisure Care retirement community within the Town of Oro Valley. In celebration of their 1St anniversary, Desert Point held a luau buffet and dance. All proceeds from the anniversary event went to benefit the Town of Oro Valley's transit service for elderly and disabled residents — Coyote Run. As a strong community supporter, Desert Point Retirement Community generated and donated $850 to Coyote Run. At this time Coyote Run plans to utilize the $850 donation from Desert Point Retirement Community to subsidize riders who are unable to pay for the service. FISCAL IMPACT: The $850 donation from Desert Point Retirement Community will be placed in an account to be specifically used for Coyote Run. RECOMMENDATIONS: Due to the fact that Desert Point has taken a proactive approach in supporting the Town's transit service for elderly and disabled residents—Coyote Run, staff would like to ask that Desert Point Retirement Community be given an official Oro Valley Certificate of Appreciation. 7/71:1 Transit erv. s A e 1 ministrator / / . C• i i ity De It opment Director i / 1 ' ' 4 Town Man.ger TOWN OF ORO VALLEY 4 COUNCIL COMMUNICATION MEETING DATE: November 17, 1999 TO: HONORABLE MAYOR &COUNCIL FROM: Chuck Sweet, Town Manager SUBJECT: Mayor and Council appointment of Patrick Coughlin to the Oro Valley Water Utility Commission SUMMARY: There currently remains one appointment to be made to the Water Utility Commission. The unfilled vacancy in question is that of John Mcgill whose term has expired as of 6-30-99. The Town Manager convened a panel consisting of Councilmember Bryant and David Hook, Water Utility Director. Interviews were conducted on two evenings during the month of August. The panel at that time made recommendations for two of the three seats. At the September 1, 1999 meeting, Mayor & Council approved the appointments of John Dohogne and Leo Leonhart. In the interim, John Mcgill continued to serve in place of the third unfilled position. FISCAL IMPACT: There is no fiscal impact associated with this request. RECOMMENDATIONS OF STAFF: It is the recommendation of the Town Manager, with concurrence of Mr. Hook, that Patrick Coughlin be appointed to the Water Utility Commission, serving a term of approximately 3 years to expire on 6- 30-02. Further, it is the recommendation of the Town Manager, with concurrence of Mr. Hook, that the constituency required by Chapter 15 of the Town Code, be assigned as follows: Constituency Member 1. Residential (Countryside) John Dohogne 2. Residential (Town #1) Mike Caporaso 3. Residential (Town #2) Jennifer Gillaspie 4. Turf Carl Staub 5. Commercial Leo Leonhart 6. At-Large (#1) Nicholas Vale 7. At-Large (#2) Patrick Coughlin RECOMMENDATIONS OF COUNCILMEMBER BRYANT Mr. Bryant's recommendation will be provided by separate report. TOWN OF ORO VALLEY COUNCIL COMMUNICATION PAGE 2 OF 2 ATTACHMENTS: 1. Patrick Coughlin, Application 2. Excerpt of Charter 15 of the Town Code. SUGGESTED MOTION: The Mayor and Council may wish to consider one of the following motions: I move to appoint Patrick Coughlin to the Oro Valley Water Utility Commission, serving a term to expire on 6-30-02 and to assign the constituency of each member as recommended above. Or I move to c .., :mi.,. r tility Director Ati 1 JAI ;4.efe Town Manager ;3i) r gl`1 I'l`l: - U t{ NAM )4 ',A1 17.4: Oran, fir, AcS ORO VALLEY WATER UTILITY COMMISSION APPLICATION PI' Prospective Oro Valley Water Commission Members: Thank you for your interest in the water planning and service activities of the Valley Water Utility Commission. The volunteers who are appointed to the Commission will be joining a group of citizens dedicated to assuring a permanent supply of the best quality water available for present and future generations. The Commission and its subcommittees will meet once or twice a month dealing with the basic fundamental issues including those in the checklist below. " Please complete this application and return to the Town Clerk's Office, 11000 N. La Canada Drive, Oro Valley, Arizona. 85737-7015. Name CoUci1k1 fGfr'i Gk_ ja_ es Last First Middle Home Address / v l?o k 47c� c"�. ) = 2 ; . : Business Address P 1� � Home Phone Business Phone ?J '3 SG Z Li40 2- FAX Number of Years in Oro Valley `7 Z Sign re Date Please check the Water Utility Commission activities in which you would be most interested and a short statement of why below the checklist. r Water Utility Commission Capital Improvement Program Budget Review and Recommendations Revenue Requirements and Rate Adjustments System Development Water Resource Development Information and Education V State & Federal Legislation Regional Water Issues c! /-? "Me o:.)c e A ) 71 c. ::c.•�el c;) ry, �-� :�71 f 11 w a 7 cr- 7 f c._- i;::•-te - -yet c eV/ 4/c! � ,� � A 1,641 r/c., p t,I c� :�.J/ t h I r C:1 t/ -.M r"e-4'1 ra .�S - �/ti-► ; ti Cl�...+C a. 7:1 O h C G G�^C/('�'j el �, U a // n Er, �.►.1 7iG/Y7 ez e-d 1/ /1 / /S !� -7 p f L,c/ Ct.e C A Cal 1 7".• wcodmod.appi6.96 ORO VALLEY WATER UTILITY COMMISSION APPLICATION 2 Please list other community, civic, professional, social, educational. cultural or athletic organizations you have been affiliated with, length of time, anyoffice held, and any achievement in those organizations you feel are noteworthy. YV1 -n i a -, d YY1 ---f-a l 1,-ire?i ( E n 4 I i c c r S -. S o i i c!)-1 c` cs a_cf r-.� .-e-r l SG tL `� � ,C. �"'1G r 4�i �7 S c(G / 4r ,2 c, rt.ia 74-LY t 7`c.r� O,✓c..r G.. J J - What do you consider your highest responsibility, skill or achievement; rofessionall and/or personally, and why? P Y `' • , 7'/ '�' /��`'/ / / 1.1 •! c t/Gt 1P 7._ 1>v) ,-,1 /t O S � a s 'JG Y�r --� --f y,�- 'i z r f/C J c / r r '� /rat �' f '( �/ �� / r' 1 _. L /'C /i C): �j C G !i .ice Gt c. S L '�CI : 7 w u t C L t S S C_�` f r>�• ,,� i „�� 3 J,�c_r'G4/Uhct d ne) c c_ r v c c l:.a r'c -'rr L c( ,1, 7* nt✓G-� f/c. J:� /c c L., C c( c, = � n3 r T' w c f I, 4- / ►r''�Com. `� G �. o ,)•c c_1 i v c. v't- �S s c.ti+ r s ( Y1/1.0 cl ►L G �"►�h wcodmod.appi6.96 ORO VALLEY WATER UTILITY COMMISSION APPLICATION 3 EMPLOYMENT Please list previous employment. List your last or present employment first: Dates of Employment Company Name & Address 2. 19 ? - / 966 , 5, .mac'. - Yvi -Z x Set_ fes, , Z.- 3. 4. 5. List Position & Job Description in numbered order as listed above. 6"A ' /e 'r ] .A r 1 i K"C S pc) { , /l_ l v, " ^ r,y/I I�L7 . ?/- '%at. *7 C _ -"fit r'' - 'L. 1OU c.c.s , Pie e- ✓I f' 1 ?' \ " Pr,circ— /O8 /`'7 /4. Cu ?c t Ci✓G (Cl O C_r '�.S r,.� S ��!7 r i"3 Ire g / r'C S U 1 s( (c.. j r cs . S 'L' `)%.)^ /`L i f`t'�L G S v 1- ; S /3 U e 72.?L./ - CC c 1° r.- v wcodmod.app/6.96 ORO VALLEY WATER UTILITY COMMISSION APPLICATION 4 EDUCATION Briefly describe your educational background: Institution/School Degree Received , )�u j i/!t, /l-c 714_ U.<-7/l/G+"c! Area of Study in numbered order as listed above: Other fields of study, professional institutes, training program, etc.: V' C Z_4 ail c(e-''1, 17 .S C / U 1 /14Gtn,G r, 11 -. .s e_,,/-,4•- s r f l�'�G. C C • /9 S F rr kvG; 7/e r' ,1 y•L J,.)G/lam 47)r r i L 3 -_u4-7 //S fi-, 5L., 7) .7 t J-71 IF DESIRED, FURTHER INFORMATION MAY BE ATTACHED wcodmod.app/6.96 EXHIBIT 3 Proposed revisions to Article 15-4 of the Town Code Modify Section 15-4-3 as follows: 15-4-3 Membership Composition, Terms and Qualifications The Oro Valley `Vater Utility Commission (Commission) shall be composed of no less than five and no more than seven members. Insofar as is possible, a o-�mem er Ofie shall be a-technically qualified residential customers from the area served by the Town of Oro Valley (C,144 Water System N:ilTn cu"rretn 'Iown��on e ! • - ' - '-- , '-' - -• a a ��- a shall be a technically qualified residential customer representing the service area of the Town of Oro Valley Water System outside of the oieffeat Town boundaries, one of which shall . : .;.o_i, _ ,,`'��`,�- �:mem�e .� �;. I 1.‘c.• i. a commercial customers and � . ` ,� . . -. . .w���:": a ea �:,:;nets • �e a a �c. icy - ore* enta turf interests. Should twe additional members be appointed PP causing the Commission to be composed of seven members, insofar as possible, they shall be technically qualified and _-_ - : __- - _ _. _ __' '_ _ __ _ t tt.• •t fi • :t T_ �`�. ,�.• -/ Myiq-.r.'r`-N' a ! szi-t' It TOWN OF ORO VALLEY SUPPLEMENTAL COUNCIL COMMUNICATION MEETING DATE: November 17, 1999 TO: HONORABLE MAYOR & TOWN COUNCIL FROM: Chuck Sweet, Town Manager SUBJ: Appointment of Member to the Water Utility Commission SUMMARY: Attached is Council Member Wayne Bryant's recommendation to the Town Council regarding Mr. David Karnas for your consideration to the Oro Valley Water Utility Commission. ATTACHMENT: November 14, 1999 Letter from Wayne Bryant to David Hook, Water Utility Director 1 1 , i, , Town Manager w Nov-14-99 12 :32P Marty Wells 520 544-9728 P.01 DISTRIBUTED TO: Cfavafort I3WN MANAGER CILE QouNcsL Qnos QOTHER 11-1 4-99 r �..�.;s,& wok David Hook - =-- ---= Director Oro Valley Water Utility Re: Communication to Council regarding my choice for Water Utility Board Dear David: I feel that Mr. Karnas would be an asset to the Oro Valley Water Utility Board. As an attorney, Mr. Karnas has worked on a variety of permitting issues including Aquifer Protection Permits (APP), Discharge Permits ( N.P.D.E.S.), etc. Mr. Karnas has many connections with the EPA, as well as, ADEQ that would help expedite Oro Valley's process when acquiring the permits for alternative water routes. In the next couple of years (once a route is selected), Oro Valley will be faced with acquiring these needed permits, and Mr. Karnas would be a great asset to the town. I feel that failin . to select this applicant will be a significant loss to our community. Thank y",' Councilman Bryant P.S. I want this letter added to Item 4 on this week's agenda. Cc. Town Manager Town Clerks CAEY A 32420 A_ = n LA J PL1. 4, -0, o q- `4, (V 4 it „.1 -.°4»,i,--..,.; ..°) to law s ,,. ,to .,:,,-. iii, 0 ___ _ _ _ _ . _ - -:! i�-�• t.• t4 ,� 1a � ReCeiVed _ y O�'`OE `a tyo n 01 oteig I ,t_.r. �t�-�� �f` ~ , -1jiZ i'l� i r 1 "-we WM � lr Zr.}';Y���l� l% 1 t�/�()t !A �i`.e�I'.t li W.tib T c!1 � pr., �t • 10'�691-ALLEYAPPLICATION i ► ` / • ; BOARD/COMMISSION Dear Oro Valley Citizen: appreciate your interest in the Town of Oro Valley. Enclosed is an informational form which when completed will allow us to quickly process your application. the information asked for is optional. your supplying the information will greatly assist in While p .�... bcst possible use of�/Cl!1 an understanding of education, experience and background to allow � bcst ..._ , - r talents which you to provide are so kindly willing to the Town of Oro Valley and for which we thank you. Please return to the Town Clerk's Office. 11,000 N. La Canada Drive. Oro Valley, Arizona 85737-7015. Ka rna s Matthew David Name Last First Middle Home Address Oro Valley, Arizona 85737 Business Address 5151 E. Broadway Blvd. , Ste. 1680 , Tucson, Arizona 85711 Home Phone Business Phone 571-9700 Number of Years in Oro Valley In area for five years 2r2 ._______---------- 1-9_ 1 1- Signature Date Please state which board/commission you wish to join and why. Oro Valley Water Utility Commi_.ss ion Board . - Please ease list other community, civic, professional. social. educational, cultural or athletic organizations you have been affiliated with, length of time, any office held, and any achievements g in those organizations you feel are noteworthy. State Bar of Arizona, Pima County Bar Association' Fed- . k. = •• .• .•s Environmental Division; State Bar of Arizona , Environmental and Natural ° Resources Section; Trial Lawyers for Public Justice; Arizona Trial Lawyers Association; University of Arizona Alumni Association; Syracuse Uniersity Alumni Association; University of New York College of Environmental Science and Forestry Alumni Association; El Conquistador Country Club (civic) What do you consider your highest responsibility, skill or achievement: professionally and/or personally, and why. Counseling clients on how to balance competing environmental and developmental interests and protecting riparian areas while delivering quality drinking water to current and future consumers. EMPLOYMENT Please list previous employment. List your past or present employment first: Dates of Employment Company Name & Address 1. 10/91-Present Siegel, Bellovin & Karnas, 5151 E. Broadway, 41680, Tucson, 85711 2. 5/90-10/91 Montgomery & Andrews, 161 Paseo de Peralta, Santa Fe, NM 3. 8/87-5/89 Syracuse Univ. Law School, Syracuse University,, Syracuse, NY 4. 5189-5/90 Mate Univ_ of New Ynrk Cn1 1 PgP of Fnvi rnnmPntl Science & Forestry, Syracuse, NY 5. 6/86-6/87 Arizona House of Representatives, Phoenix, AZ (List Position & Job Description in numbered order as listed above) 1 . Associate attorney and partner - counseling & litigating environmental cases including drinking water and ground water. 2. Associate attorney - advising • ..• . - -e Si -• t.•ss.-• - ..uu. '_ . - ' - * a • ' .. u*.* .. . ground water protection. 3. Research assistant on various publications for professors _e: environmental regulatiQn & litigation. 4, Instructing graduate students in environmental science programs at SUNY regarding environ- , sI::i• - - . •. - •,- I._ - - . _ - I .. .. ►_ - _ •• • i •- - A 5 . Research assistant at Arizona House of Representatives for Commerce Committee and Health and Human Resources Committee. - - EDUCATION Briefly describe your educational background: Institution/School Degree Received 1. Syracuse University, College of Law Juris Doctor, Cum Laude (with honors) 2. State University of New York, College of Environmental Science & Forestry - U. - Das -- . a' ' 01m—a .1 ' • i' Rar-hQl nr fl reei.n Pol i t i ca- ,. University of Arizona _ Sciende Area of Study in numbered order as listed above: 1 . Law and environmental law •. E vi ••Its• . .—• — •• —• ' r••H-• . .• • • •• .PZ. - •_• manacement 3. Political science and social sciences Other fields of study, professional institutes. training program. etc: 1 . Continuing Legal Education instructor for attorneys, provided instruction duri • seminars s••nsor_ed b state and local bar ass. i. '4•0 410 -• ' -••- mental compliance with Arizona Aquifer Protection Act, Clean Water Act and other environmental statutes and regulations. 2. Frequent lecturer for the Arizona Commission on the Environment, environ- mental . —s: __ i•• — i— whi h i •••. • _•. • •- ' ••. -•. ■ es—• • Fmvi ronrr nt al Qual 1 ty_ IF DESIRED, FURTHER INFORMATION MAY BE ATTACHED In addition to the employment listed above, I have been a law clerk for Bilby & Shoenhair (now known as Snell & Wilmer) and the Honorable John Lawton of the Appellate Division of the Supreme Court, State of New York. I have years of experience stakeholders regarindg working with environmental groups, concerned citizens and stakehold eg g controversial environmental proposals. In each of these situations I have been successful at resolving disputes and balancing the competing interests of all involved parties. I have substantial experience with the following statutes: Arizona Aquifer Protection Law, Safe Drinking Water Act, Clean Water Act, National Environmental Policy Act, Endangered Species Act, Solid Waste Disposal Act, Toxic Substances Control Act and the Environmental Response Compensation and Liability Act as well as various other environmental statues. I am also familiar with administrative rules and regulations governing drinking water in Arizona and the use of effluent. 3 DOC\APPFORM.KEC\10/96 5 TOWN OF ORO VALLEY COUNCIL COMMUNICATION MFE1ING DATh November 17, 1999 TO: HONORABLE MAYOR & COUNCIL FROM: Shirley Seng, Utility Administrator SUBJECT: Ordinance No. (0) 99-58 Amending The Oro Valley Town Code Article 15-4-5 Changing The Due Date Of The Annual Report SUMMARY: Pursuant to the Oro Valley Town Code Article 154-5, the Oro Valley Water Utility Commission is to render to the Town Council an annual report on or before March 1st. The key component of the Annual Report is the rate analysis and review of revenue requirements. In the past, this work utilized calendar year data, thus the analysis could not begin until January of each year. For the past three years, the Commission has been unsuccessful in meeting the March 1st due date. At their regular meeting on 9-13-99, the Commission determined that by using fiscal jiear data, work on the rate analysis could begin in October rather than January. As a result, the Commission believes the Annual Report can be completed and presented to Council by the first Town Council meeting in March and is recommending that the Town Code be amended to allow the due date of the Annual Report to coincide with the first C ouncil meeting in March. FISCAL IMPACT: None. COMMISSION RECOMMINDATIONS: The Oro Valley Water Utility Commission respectfully recommends amending the Oro Valley Town Code Article 154-5 to specify that the Commission shall render to the Town Council an annual report by the first Council meeting in March. STAFF RECOMMINDATIONS: Staff respectfully recommends amending the Oro Valley Town Code Article 154-5 to change the annual report date to April 1st to assist the timely rendering of the report. SUGGESTED MOTION: I move to approve Ordinance No. (0) 99- 58 Amending the Oro Valley Town Code Article 154-5 changing the due date of the annual report to coincide with the first Council meeting in March. Or I move to approve Ordinance No. (0) 99- 58 Amending the Oro Valley Town Code Article 154-5 changing the due date of the annual report to April 1st. Or I move to • TOWN OF ORO VALLEY COUNCIL COMMUNICATION PAGE 2 OF 2 ATTACHMENTS: 1. Ordinance No. (0)99-58 Amending the Oro Valley Town Code Article 15-4-5 changing the due date of the annual report. lab i&! Utility Admini trator C-vga'J1/4 C—AeML---- ater Utility Direct Town Manager ORDINANCE NO. (0)99- 58 AN ORDINANCE OF THE MAYOR AND COUNCIL OF THE TOWN OF ORO VALLEY, PIMA COUNTY, ARIZONA AMENDING THE ORO VALLEY TOWN CODE ARTICLE 15-4-5 CHANGING THE DUE DATE OF THE ANNUAL REPORT WHEREAS, ORO VALLEY has the requisite statutory authority to acquire, own and maintain a water utility for the benefit of the landowners within and without the Town's corporate boundaries pursuant to the provision of Arizona Revised Statute 48-571 et. Seq., and WHEREAS, ORO VALLEY is a political subdivision of the State of Arizona, and pursuant to Article 13, Section 7 of the Arizona Constitution, is vested with all the rights, privileges and benefits, and entitled to the immunities and exemptions granted municipalities and political subdivision under the Constitution and laws of the State of Arizona and the United States; and WHEREAS, ORO VALLEY desires to change the due date of annual report that is rendered by the Oro Valley Water Utility Commission; and WHEREAS, ORO VALLEY now finds it necessary to amend the Oro Valley Town Code according to state law; NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF ORO VALLEY, PIMA COUNTY, ARIZONA: 1) That Article 15-4-5 of the Oro Valley Town Code is hereby amended as follows: See attached Exhibit 'A'. 2) That any prior ordinances or rules in conflict with this ordinance are hereby rescinded. 3) That if any court of competent jurisdiction finds any clause or provision to be illegal, that part shall be severable and shall not effect the rest of the document. Adopted this 17th day of November , 1999 by the Mayor and Council of Oro Valley. Mayor ATTEST: APPROVED AS TO FORM: Town Clerk Town Attorney EXHIBIT 'A' Oro Valley Town Code Article 15-4-5 Committee Reports The Oro Valley Water Utility Commission shall render to the Town Council an annual report ea or before March 1 by the first Council meeting in March and send additional reports and recommendations as it determines, or as requested by the Town Manager. At a minimum these reports will contain an annual review of the proposed water system capital improvement program, and recommendations to the town Council of an annual and five year capital budget; and an annual review of the water revenue requirements of the water utilities and recommend to the Town Council rate adjustments as required. EXHIBIT 'A' Oro Valley Town Code Article 15-4-5 Committee Reports The Oro Valley Water Utility Commission shall render to the Town Council an annual report on or before March 1 Aril and send additional reports and recommendations as it determines, or as requested by the Town Manager. At a minimum these reports will contain an annual review of the proposed water system capital improvement program, and recommendations to the town Council of an annual and five year capital budget; and an annual review of the water revenue requirements of the water utilities and recommend to the Town Council rate adjustments as required. 11-17-1999 a=56PM FROM P. 2 11 1� 99 SUPPLEMENTAL INFORMATION—ANNUAL REPORT DUE DATE JAN 98 JUL 98 DEC 98 1999 Annual Report � JUL 98 DEC 98 JUN 99 2000 Annual Report i 1 • Financial data and bill count data must be for the same time frame in order to perform a Cost of Service Study. • The Cost of Service Study is then used in conjunction with projected expenditures to perform a Rate Analysis. • The change from calendar year data to, iscal year data does not change the outcome of the Rate Analysis or the Cost of Service Study, but it considerably simplifies and expedites the work performed by the rate consultant. • The change impacts the Annual Report by enabling staff to deliver the required data to the consultant 3 to 4 months earlier which will allow for the report to be rendered on time. 6 TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: November 17, 1999 TO: HONORABLE MAYOR & COUNCIL FROM: David L. Andrews, Finance Director SUBJECT: Public Hearing - ORDINANCE NO. (0)99- 57 RELATING TO THE PRIVILEGE LICENSE TAX; ADOPTING "THE 1999 AMENDMENTS TO THE TOWN TAX CODE OF THE TOWN OF ORO VALLEY, ARIZONA" BY REFERENCE; ESTABLISHING AN EFFECTIVE DATE AND PROVIDING PENALTIES FOR VIOLATIONS. SUMMARY: All Arizona cities and towns which impose a local sales tax have adopted the Model Cities Tax Code. The Town of Oro Valley has adopted this model and incorporated the model language into the Town's Tax Code. Periodically, the League of Arizona Cities and Towns coordinates proposed statewide tax code amendments to promote uniformity and tax code compliance throughout the State. The item you have before you would incorporate proposed tax code amendments for 1999 into the Town Code. The amendments are a combination of changes suggested by the Unified Audit Committee (statewide group of city auditors and the Arizona Department of Revenue) and the Arizona Tax Research Association. The amendments reflect recent changes in state sales tax law. ANALYSIS: The League has provided a summary of the proposed tax code changes (Exhibit A). The amendments are quite detailed but in summary would affect the following types of businesses/activities: • Purchases made by hospitals and various income producing capital equipment purchases • Exempts rental income derived from incarcerating prisoners from the sales tax • Exempts from the sales tax income derived from alternative fuel vehicles • Various retail sales exemptions These changes will have little, if any, impact on the Town's sales tax base. TOWN OF ORO VALLEY COUNCIL COMMUNICATION PAGE 2 OF 2 ATTACHMENTS: 1. ORDINANCE NO. (0)99-57 RELATING TO THE PRIVILEGE LICENSE TAX; ADOPTING "THE 1999 AMENDMENTS TO THE TOWN TAX CODE OF THE TOWN OF ORO VALLEY, ARIZONA" BY REFERENCE; ESTABLISHING AN EFFECTIVE DATE AND PROVIDING PENALTIES AND VIOLATIONS. 2. Exhibit A—Introduction and Summary of 1999 Tax Code Changes 3. Exhibit B —The 1999 Amendments to the Town Tax Code of the Town of Oro Valley, Arizona. RECOMMENDATION: I recommend the approval of ORDINANCE NO. (0)99-57 ADOPTING THE "1999 AMENDMENTS TO THE TOWN TAX CODE OF THE TOWN OF ORO VALLEY, ARIZONA". SUGGESTED MOTION: I move to approve ORDINANCE NO. (0)99- 57 ADOPTING "THE 1999 AMENDMENTS TO THE TOWN TAX CODE OF THE TOWN OF ORO VALLEY, ARIZONA" . David L. Andrews Finance Director jtActe. Chuck Sweet Town Manager ORDINANCE NO (0)99- AN ORDINANCE OF THE TOWN OF ORO VALLEY, ARIZONA, RELATING TO THE PRIVILEGE LICENSE TAX; ADOPTING "THE 1999 AMENDMENTS TO THE TAX CODE OF THE TOWN OF ORO VALLEY" BY REFERENCE; ESTABLISHING AN EFFECTIVE DATE; PROVIDING FOR SEVERABILITY AND PROVIDING PENALTIES FOR VIOLATIONS. BE IT ORDAINED BY THE MAYOR AND COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA: Section 1: That certain document known as "The 1999 Amendments to the Tax Code of the Town of Oro Valley," three copies of which are on file in the office of the town clerk of the Town of Oro Valley, Arizona, which document was made a public record by Resolution No. (R)99- 106 of the Town of Oro Valley, Arizona, is hereby referred to, adopted and made a part hereof as if fully set out in this ordinance. Section 2: Except as provided in Sections 3 and 4 of this ordinance, the provisions of this ordinance and the public record adopted herein are effective from and after December 31, 1999. Section 3: The following provisions of the public record adopted herein are retroactive to January 1, 1999: (a) Subsection (b)(3) of Section 8A-415. (b) Subsection (c)(1)(A) of Section 8A-416 (c) Subsection (b)(1)(A) of Section 8A-417. Section 4: The following provisions of the public record adopted herein are retroactive to May 5, 1999: (a) Subsection (c)(10) of Section 8A-450 (b) Subsection (kk) of Section 8A-465. Section 5: Any person found guilty of violating any provision of these amendments to the tax code shall be guilty of a class one misdemeanor. Each day that a violation continues shall be a separate offense punishable as herein above described. Section 6: If any section, subsection, sentence, clause, phrase or portion of this ordinance or any part of these amendments to the tax code adopted herein by reference is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions thereof. PASSED AND ADOPTED by the Mayor and Council of the Town of Oro Valley, Arizona, this 17th day of November , 1999. Paul H. Loomis, Mayor ATTEST: Kathryn E. Cuvelier, Town Clerk APPROVED AS TO FORM: Dan Dudley, Town Attorney EXHIBIT A INTRODUCTION AND SUMMARY OF 1999 TAX CODE CHANGES The 1999 amendments to the tax code are the result of approximately eight months of negotiations with the business community. Much in these amendments conforms the Model City Tax Code with State statute. As you will notice in the attached adopting ordinance, three of the sections pertain to construction contracting and agency agreements and have a retroactive effective date of January 1, 1999. Two other sections, pertaining to the sale of alternative fuel vehicles, have a retroactive effective date to May 5, 1999. The changes to the tax code proposed in the 1998 amendments were all approved by the Municipal Tax Code Commission on September 10, 1999. The technical and conforming amendments were submitted by the League on behalf of the Unified Audit Committee composed of city tax officials and the Department of Revenue. Although a few of the amendments are a direct result of the preemptive state legislation,a significant part of these changes resulted from comments or suggestions by business representatives on desired amendments to the tax code. The enclosed amendment tailors the approved changes to your current tax code. Following adoption by your city or town and notification to the League,we will integrate the amendment into your tax code and mail the amended pages. The effective date of most of the amendments is January 1, 2000 which means that we are urging adoption before December 1, 1999. Tax code changes do not go into effect until 30 days after passage. Although there are differing opinions on whether a public hearing is required,we recommend that a public hearing be held by the city or town council prior to adoption of the amendment. Under A.R.S. §42-6054, notice of the hearing must be published at least once in a newspaper of general circulation in the city or town at least fifteen days before the hearing. The hearing can be held in conjunction with a regular or special council meeting. If you desire assistance with the public hearing or with explanation of the amendments to the city/town council, this can be arranged by calling the League office. This amendment has been prepared as a public record to allow adoption by reference. The resolution declaring the amendment as a public record should be adopted prior to adoption of the ordinance. Both, however,can be accomplished at the same meeting. Publication of the adopting ordinance should follow adoption. Under the adoption by reference procedure, publication of the full text of the amendment is not required. Following is a section by section summary of each change to the code. There are several amendments to the code that pertain to local or model options, and these are highlighted by an asterisk ('). These particular amendments may or may not affect your local tax code. As always, questions on the tax code or these amendments can be directed to the League. We, in turn, will call upon knowledgeable tax officials from several cities and towns if your question involves an issue beyond our general expertise. Sec. -110. Definitions: Income-producing capital equipment. 1. Expands the definition of income-producing capital equipment to include theurchase and installation on of agricultural pollution control equipment,environmental control machineryand equipment,Pro ertyused for environmental remediation activities, cleanroom contracting activities, egg production facilities and equipment purchased to comply with a recent Federal Communication Commission (FCC) mandate. 2. Expands the exemptions to include parts used in operating pipes and valves. 3. Expands the exemptions for liquid, solid or gaseous chemicals to include those used in printing. "Printing" is defined as a commercial printingoperation and includesP g p job printing, engraving, embossing, copying and bookbinding. 4. Amends the income-producing capital equipment exemption to include all railroad p a iroad rolling stock and signaling equipment. 5. Amends the definition of expendable materials. Sec._-415. Construction contracting: construction contractors. Sec. -416 Construction contracting: speculative builders. Sec. -417. Construction contracting: owner-builders who are not speculative builders. -418 (RESERVED)� _ • 1. Adds a deduction under the construction contracting classifications for theurchase of machinery, ry, equipment or other personal property that is exempt under the retail classification and adds a new regulation consistent with the state change that eliminates the need to enter into an agency yagreement with a construction contractor to avoid paying privilege tax on tangible personal property included in a construction contract. The change impacts purchases made byhospitals and various income producing capital equipment purchases. P (This change will be retroactive to January 1, 1999.) 2. Provides a deduction from the construction contracting, speculative builder and owner-builder sections for proceeds from the installation, assembly, repair or maintenance of income-producing capital equipment that does not become permanentlyalta P g shed. 3. Under prescribed conditions, exempts construction contracts for agricultural pollution control 9 equipment, environmental control machinery and equipment, environmental remediation activities, c eanrooms and egg production facilities. 4. Clarifies and simplifies the deductions and tax credits which apply to owner-builders and speculative builders by moving them from Section -418 to SectionsP -416 and -417 respectively. Sec. -444. Hotels. Sec. -445. Rental, leasing, and licensing for use of real property. Adds a deduction for gross receipts derived from incarcerating or detaining inmates. The cities are required by state law to make this change. q Sec. -450. Rental, leasing,and licensing for use of tangible personal property. Exempts from tax the rental,leasing and licensing of alternative fuel vehicles. The cities are required bystate law to make this change. Sec. -460. Retail sales: measure of tax; burden of proof; exclusions. Clarifies that the sale of a telephone calling card is taxable under the retail classification and exempt from tax under the telecommunications classification. 2 Sec. -465. Retail sales: exemptions. 1. Makes a technical correction, for those cities/towns that tax food, to clarify a reference to the United States Code. 2. Exempts from tax the sale of food to a nonprofit charitable organization that has qualified under section 501(c)(3) of the Internal Revenue Code and that regularly serves meals to the needy and indigent on a continuing basis at no cost. 3. Exempts from tax gas used to fuel compressor equipment used to pressurize the gas pipeline. 4. Exempts from tax the sale of alternative fuel vehicles. The cities are required by state law to make this change. Sec. -470. Telecommunication services. Conforming change on pre-paid calling cards. See Section -460. Sec. -475. Transporting for hire. Exempts from tax the transporting of persons or goods on short-line railroads. Sec. -575. Judicial review. Places the burden of proof, when determining a factual issue relevant to the taxpayer's tax liability, on the city/town. *Sec. -660. Use tax: exemptions. See Section -465 for an explanation of the exemptions. Not all cities and towns will have this change. Reg. -100.4. Out-of-City/Out-of-State Sales: Sales to NATIVE AMERICANS. Replaces the term "Indian"with"Native American". 3 EXHIBIT B 1999 AMENDMENTS TO THE TAX CODE OF THE TOWN OF ORO VALLEY Section 1. Section 8A-110 of the Tax Code of the Town of Oro Valley is amended to read: Sec. 8A-110. Definitions: Income-producingcapital equipment. p q ui pment. Sec. 8A-110. Definitions: Income-producing capital equipment P q pment (a) The following tangible personal property, other than items excluded in subsection(d)below,shall be deemed "income-producinq capital equipment"for theu oses of p rp this Chapter: (1) machinery or equipment used directly in manufacturing, refining or metallurgical operations. processing,fabricating,job printing, „ „ g p ns. The terms "manufacturing", "processing","fabricating", "job printing", "refining", and "metallurgical" as used in this paragraph g those operations commonlyP g aph refer to and include understood within their ordinary meaning. "Metallurgical operations" includes leaching, milling, precipitating, smeltingand refining. (2) mining machinery, or equipment, used directlyin the process P ocess of extracting ores or minerals from the earth for commercial purposes, including equipment required to prepare the materials for extraction and handling, loading or transporting such extract surface. "Mining"includes underground, P 9 ed material to the surface and open pit operations for extracting ores and minerals. (3) tangible personal property, sold to persons engaged in fi business classified under the telecommunications classification, consisting of central office switching equipment; switchboards;private branch exchange equipment;microwave radio fiber, coaxial equipment,and carrier equipment including optical cable, and other transmission media which are components of carrier systems. (4) machinery, equipment, or transmission lines used directly in producing or transmitting electrical power, but not including distribution. Transformers and control equipment used at transmission substation constitutesites equipment used in producing or transmitting electrical power. (5) pipes or valves four inches (4") in diameter or larger AND artificial g RELATED EQUIPMENT, used to transport oil, natural gas, rtificial gas,water, or coal slurry. FOR THE PURPOSE OF THIS SECTION, RELATED EQUIPMENT INCLUDES: COMPRESSOR UNITS, REGULATORS, MACHINERY AND EQUIPMENT FITTINGS,SEALS AND ANY OTHER PARTS THAT ARE USED IN OPERATING THE PIPES OR VALVES. (6) aircraft, navigational and communication instruments, and other accessories and related equipment sold to: (A) a person holding a federal certificate ofublic convenience e and necessity or foreign air carrier permit for air transportation for use as or in conjunction with or becoming a part of aircraft to be used transportto � persons, property or united states mail in intrastate, interstate or foreign commerce. (B) any foreign government for use by suchovernment outside e of this State. (C) persons who are not residents of this State and who will not u such use such property in this State other than in removing property from this State. This subdivision also applies to corporations that are not incorporated in this State, regardless maintaining a place of business in this Stat of State, if the principal corporate office is located outside this State and the property will not be used in this State o in removing the propertyfrom this State. Cher than (7) machinery, tools, equipment and related supplies used or consumed ed directly in repairing, remodeling or maintaining , aircraft engines or aircraft component parts by or on behalf of a certificated or licensed carrier of persons or property. rty.(8) railroad rolling stock, rails, ties and signal control equipment used directly to transport persons or property - _ , • _ _ _ - •_ (9) machinery or equipment used directly to drill for oil oras or used directly ectly in the process of extracting oil or gas from the earth for commercial purposes. (10) buses or other urban mass transit vehicles which are used directly to transport persons or 1 property for hire or pursuant to a governmentally adopted and controlled urban mass transportation program and which are sold to bus companies holding a federal certificate of convenience and necessity or operated by a city,town or other governmental entitybyor any person contractingwith such governmental entity as part of a governmentally adopted and controlled program to provide urban mass transportation. (11) metering, monitoring, receiving, and transmitting equipment acquired by persons engaged in the business of providing utility services or telecommunications services; but only to the extent that such equipment is to be used by the customers of such persons and such persons separately charge or bill their customers for use of such equipment. (12) groundwater measuring devices required under A.R.S. §45-604. (13) machinery or equipment used in research and development. In thisara ra h "research P 9 p er sac and development"means basic and applied research in the sciences and engineering, and designing,developing or testingprototypes, processes P typ , or new products, including research and development of computer software that is embedded in or an integral part of the roto productg prototype or new or that is required for machinery or equipment otherwise exempt under this section to function effectively. Research and developmentp Y do not include manufacturing quality control, routine consumer product testing, market research, sales promotion, sales service, research in social sciences or psychology, computer software research that is not included in the definition of research and development, or other nontechnological activities or technical services. (14) (Reserved) (15) Included in income producing capital equipment are liquid,solid oraseous chemicals used sed in manufacturing, processing, fabricating, mining, refining, metallurgical operations or research and development OR JOB PRINTING, if using or consuming the chemicals,P alone or as part of an integrated system of chemicals, involving direct contact with the materials from which the product is produced for the purpose of causing orermittin a chemical or physical changematerials to occur in the P g e ials as part of the production process. This subsection does not include chemicals that are used or consumed in activities such asacka in storage or transportation but does not affect P g g' any deduction for such chemicals that is otherwise provided by this Code. Chemicals meeting the requirements of this subsection are deemed not to be expendable under subsection (d) of this section. (16) cleanrooms that are used for manufacturing, processing, fabrication or research and development, as defined in paragraph (13) of this subsection, of semiconductorroducts. For purposes of this paragraph, "cleanroom" meansP all property that comprises or creates an environment where humidity, temperature, particulate matter and contamination are precisely controlled within specified parameters, without regard to whether theroe is actually contained within that environmentP p � or whether any of the property is affixed to or 'ncorporated into real property. Cleanroom: kA) includes the integrated systems,fixtures, piping, movable partitions, lighting and all property that is necessaryor adapted g g p to reduce contamination or to control airflow, temperature, humidity, chemical purity or other environmental conditions or manufacturing tolerances, as well as the production machinery and equipment operating in conjunction with the cleanroom environment. (B) does not include the building or other permanent, nonremovable component of the environment. building that houses the cleanroom enviro P (17) machinery and equipment that are purchased by or on behalf of the owners of a soundstage complex and primarily used for motion picture, multimedia or interactive video production in the complex. This paragraph applies only if the initial construction of the soundstage complex begins after June 30, 1996 and before Januaryg 1, 2002 and the machinery and equipment are purchased before the expiration of five years after the start of initial construction. For purposes of this paragraph: (A) "motion picture, multimedia or interactive video production" includesroducts for theatrical and television release, educationalp presentations, electronic retailing, documentaries, music videos, industrial films, cd-rom, video game production, commercial advertising and television episode production and other genres that are introduced through developing technology. 2 (B) "soundstage complex" means a facility of multiple stages including 9 production offices, construction shops and related areas, prop and costume shopsstorage areas, parking for production vehicles and P ' g areas that are leased to businesses that complement the production needs and orientation of the overall facility. (18) tangible personal roe that � property rty i s used by either of the following to receive, store, convert, produce, generate, decode, encode, control or transmit telecommunications information: (A) any direct broadcast satellite television or data transmission service that operates pursuant to 47 Code of Federal Regulations parts 25 and 100. (B) any satellite television or data transmission facility,if both of the following g conditions are met: (i) over two-thirds of the transmissions, measured in megabytes, transmitted by the facility during the test period were transmitted to or on behalf of one or more direct broadcast satellite television or data transmission services that operate pursuant to 47 Code of Federal Regulations parts 25 and 100. (ii) over two-thirds of the transmissions, measured in megabytes, transmitted by or on behalf of those direct broadcast television or data transmission services during the test period were transmitted by the facility to or on behalf of those services. For purposes of subdivision (B) of this paragraph, "test period" means the three hundred sixty-five daybeginning ty- period on the later of the date on which the tangible personal property is purchased or the date on which the direct broadcast satellite television or data transmission service first transmits information to its customers. (19) MACHINERY AND EQUIPMENT THAT IS USED DIRECTLY IN THE FEEDING OF POULTRY, THE ENVIRONMENTAL CONTROL OF HOUSING FOR POULTRY, THE MOVEMENT OF EGGS WITHIN A PRODUCTION AND PACKAGING FACILITY OR THE SORTING OR COOLING OF EGGS.THIS EXEMPTION DOES NOT APPLY TO VEHICLES USED FOR TRANSPORTING EGGS. (20) MACHINERY OR EQUIPMENT, INCLUDING RELATED STRUCTURAL COMPONENTS, THAT IS EMPLOYED IN CONNECTION WITH MANUFACTURING, PROCESSING, FABRICATING, JOB PRINTING, REFINING, MINING, NATURAL GAS PIPELINES, METALLURGICAL OPERATIONS, TELECOMMUNICATIONS, PRODUCING OR TRANSMITTING ELECTRICITY OR RESEARCH AND DEVELOPMENT THAT IS USED DIRECTLY TO MEET OR EXCEED RULES OR REGULATIONS ADOPTED BY THE FEDERAL ENERGY REGULATORY COMMISSION, THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, THE UNITED STATES NUCLEAR REGULATORY COMMISSION, THE ARIZONA DEPARTMENT OF ENVIRONMENTAL QUALITY OR A POLITICAL SUBDIVISION OF THIS STATE TO PREVENT, MONITOR, CONTROL OR REDUCE LAND, WATER OR AIR POLLUTION. (21) MACHINERY OR EQUIPMENT THAT ENABLES A TELEVISION STATION TO ORIGINATE AND BROADCAST OR TO RECEIVE AND BROADCAST DIGITAL TELEVISION SIGNALS AND THAT WAS PURCHASED TO FACILITATE COMPLIANCE WITH THE TELECOMMUNICATIONS ACT OF 1996(P.L.104-104;110 STAT.56;47 UNITED STATES CODE SECTION 336)AND THE FEDERAL COMMUNICATIONS COMMISSION ORDER ISSUED APRIL 21, 1997, 47 CODE FEDERALOF REGULATIONS PART 73. THIS PARAGRAPH DOES NOT EXEMPT ANY OF THE FOLLOWING: (A) REPAIR OR REPLACEMENT PARTS PURCHASED FOR THE MACHINERY EQUIPMENT DESCRIBED INT HIS PARAGRAPH. OR (B) MACHINERY OR EQUIPMENT PURCHASED TO REPLACE MACHINERY OR EQUIPMENT FOR WHICH AN EXEMPTION WAS PREVIOUSLY CLAIMED AND TAKEN UNDER THIS PARAGRAPH. (C) ANY MACHINERY OR EQUIPMENT PURCHASED AFTER THE TELEVISION STATION HAS CEASED ANALOG BROADCASTING, OR PURCHASED AFTER NOVEMBER 1, 2009, WHICHEVER OCCURS FIRST. (b) The term "income-producing capital equipment" shall further include ancillary machinery equipment used for the treatment of wasteproducts createdand by the business activities which are 3 allowed to purchase"income-producing capital equipment" defined in subsection (a) above. (c) The term "income-producing capital equipment" shall further include repair and replacement parts, P , other than the items in subsection (d) below, where the property is acquired to become an integral part of another item itemized in subsections (a) or (b) above. (d) The tangible personal property defined as income-producing capital equipment in this Section shall not include: (1) expendable materials. FOR PURPOSES OF THIS PARAGRAPH, EXPENDABLE MATERIALS DO NOT INCLUDE ANY OF THE CATEGORIES OF TANGIBLE PERSONAL PROPERTY SPECIFIED IN SUBSECTIONS (a), (b) OR (c) OF THIS SECTION REGARDLESS OF THE COST OR USEFUL LIFE OF THAT PROPERTY. (2) janitorial equipment and hand tools. (3) office equipment, furniture, and supplies. (4) tangible personal property used in selling or distributing activities. (5) motor vehicles required to be licensed by the State of Arizona, except buses or other urban mass transit vehicles specifically exempted pursuant to subsection (a)(10) above without regard to the use of such motor vehicles. (6) shops, buildings, docks, depots, and all other materials of whatever kind or character not specifically included as exempt. (7) motors and pumps used in drip irrigation systems. (e) For the purposes of this Section: (1) "aircraft"includes: (A) an airplane flight simulator that is approved by the Federal Aviation Administration for use as a Phase II or higher flight simulator under Appendix H, 14 Code of Federal Regulations Part 121. (B) tangible personal property that is permanently affixed or attached as a component part of an aircraft that is owned or operated by a certificated or licensed carrier of persons or property. (2) "other accessories and related equipment"includes aircraft accessories and equipment such as ground service equipment that physically contact aircraft at some point during the overall carrier operation. 4 Section 2. Section 8A-415 of the Tax Code of the Town of Oro Valley is amended to read: Sec. 8A-415. Construction contracting: construction contractors. (a) The tax rate shall be at an amount equal to two percent(2%)of the gross income from the business upon every construction contractor engaging or continuing in the business activity of construction contracting within the Town. (1) However, gross income from construction contractingshall not include ude charges related to groundwater measuring devices required by A.R.S. Section 45-604. (2) (Reserved) (3) gross income from construction contracting shall not include gross income from the sale of manufactured buildings taxable under Section 8A-427. (b) Deductions AND EXEMPTIONS. (1) Gross income derived from acting as a"subcontractor"shall be from t p the tax imposed by this Section. (2) All construction contracting gross income subject to the tax and not deductible J herein shall be allowed a deduction of thirty-five percent (35%). (3) THE GROSS PROCEEDS OF SALES OR GROSS INCOME ATTRIBUTABLE TO THE PURCHASE OF MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY THAT IS EXEMPT FROM OR DEDUCTIBLE FROM PRIVILEGE UNDER: OR USE TAX (A) SECTION 8A-465, SUBSECTIONS (g)AND B (RESERVED) (P) ( ) SHALL BE EXEMPT OR DEDUCTIBLE, RESPECTIVELY, FROM THE TAX IMPOSED THIS SECTION. BY (4) THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED FROM A CONTRACT ENTERED INTO FOR THE INSTALLATION, ASSEMBLY, REPAIR OR MAINTENANCE OF INCOME-PRODUCING CAPITAL EQUIPMENT, AS DEFINED EFINED IN SECTION 8A-110, THAT DOES NOT BECOME A PERMANENT ATTACHMENT TO A BUILDING, HIGHWAY, ROAD, RAILROAD, EXCAVATION OR MANUFACTURED BUILDING OR OTHER STRUCTURE, PROJECT, DEVELOPMENT OR IMPROVEMENT SHALL BE DEDUCTED FROM THE TAX IMPOSED BY THIS SECTION. IF THE OWNERSHIP OF THE REALTY IS SEPARATE FROM THE OWNERSHIP OF THE INCOME-PRODUCING CAPITAL EQUIPMENT, THE DETERMINATION AS TO PERMANENT ATTACHMENT SHALL BE MADE AS IF THE OWNERSHIP WAS THE SAME. THE DEDUCTION PROVIDED IN THIS PARAGRAPH DOES NOT INCLUDE GROSS PROCEEDS OF SALES OR GROSS INCOME FROM THAT PORTION OF ANY CONTRACTING ACTIVITY WHICH CONSISTS OF THE DEVELOPMENT OF, OR MODIFICATION TO,REAL PROPERTY IN ORDER TO FACILITATE THE INSTALLATION, ASSEMBLY, REPAIR, MAINTENANCE OR REMOVAL OF THE INCOME-PROD UCING CAPITAL EQUIPMENT. FOR PURPOSES OF THIS PARAGRAPH, "PERMANENT ATTACHMENT" MEANS AT LEAST ONE OF THE FOLLOWING: (A) TO BE INCORPORATED INTO REAL PROPERTY. (B) TO BECOME SO AFFIXED TO REAL PROPERTY THAT IT BECOMES PART THE REAL PROPERTY. OF (C) TO BE SO ATTACHED TO REAL PROPERTY THAT REMOVAL WOULD CAUSE SUBSTANTIAL DAMAGE TO THE REAL PROPERTY FROM WHICH IT IS REMOVED. (5) THE GROSS PROCEEDS OF SALES OR GROSS INCOME RECEIVED FROM A CONTRACT FOR THE CONSTRUCTION OF AN ENVIRONMENTALLY CONTROLLED FACILITY FOR THE RAISING OF POULTRY FOR THE PRODUCTION OF EGGS THE SORTING, OR COOLING AND PACKAGING OF EGGS SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER THIS SECTION. (6) THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED FROM INSTALLATION,ASSEMBLY,REPAIR THE OR MAINTENANCE OF CLEAN ROOMS THAT ARE 5 DEDUCTED FROM THE TAX BASE OF THE RETAIL CLASSIFICATION PURSUANT TO SECTION 8A-465, SUBSECTION (g) SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER THIS SECTION. (7) THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED FROM A CONTRACT ENTERED INTO WITH A PERSON WHO IS ENGAGED IN THE COMMERCIAL PRODUCTION OF LIVESTOCK, LIVESTOCK PRODUCTS OR AGRICULTURAL, HORTICULTURAL,VITICULTURAL OR FLORICULTURAL CROPS OR PRODUCTS IN THIS STATE FOR THE CONSTRUCTION, ALTERATION, REPAIR, IMPROVEMENT, MOVEMENT, WRECKING OR DEMOLITION OR ADDITION TO OR SUBTRACTION FROM ANY BUILDING, HIGHWAY, ROAD, EXCAVATION, TION, MANUFACTURED BUILDING OR OTHER STRUCTURE,PROJECT,DEVELOPMENT OR IMPROVEMENT USED DIRECTLY AND PRIMARILY TO PREVENT,MONITOR,CONTROL OL OR REDUCE AIR, WATER OR LAND POLLUTION SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER THIS SECTION. (c) "Subcontractor" means a construction contractor performing work for either: (1) a construction contractor who has provided the subcontractor with a written declaration that he is liable for the tax for the project and has provided the subcontractor his Town Privilege License number. (2) an owner-builder who has provided the subcontractor with a written declaration that: (A) the owner-builder is improving the property for sale; and (B) the owner-builder is liable for the tax for such construction contractingactivity;ty, and (C) the owner-builder has provided the contractor his Town Privilege License number. umber. (3) a person selling new manufactured buildings who hasrovided the subcontractor tractor with a written declaration that he is liable for the tax for the site preparation and set-up; and provided the subcontractor his Town Privilege License number. Subcontractor also includes a construction contractor performingwork for another above. subcontractor as defined Section 3. Section 8A-416 of the Tax Code of the Town of Oro Valleyamended is to read: Sec. 8A-416 Construction contracting: speculative builders. (a) The tax shall be equal to two percent(2%)of the gross income from the business activity upon every person engaging or continuing in business as a speculative builder within the Town. (1) The gross income of a speculative builder considered taxable shall include the total selling price from the sale of improved real property at the time of closingof escrow or transfer title. of (2) "Improved Real Property" means any real property: (A) upon which a structure has been constructed; or (B) where improvements have been made to land containingno structure (such paving or landscaping); or ( ch as (C) which has been reconstructed as provided by Regulation;ulation; or (D) where water, power, and streets have been constructed to theroPertY line. P (3) "Sale of Improved Real Property"includes any form of transaction,whether characterized r' zed as a lease or otherwise, which in substance is a transfer of title of, or equitable ownershipin, improved real property and includes anylease q of the property for a term of thirty(30)years or more (with all options for renewal being included as a part of the term). In the case of multiple unit projects, "sale" refers to the sale of the entire project or to the sale of any individual parcel or unit. (4) "Partially Improved Residential Real Property,"as used in this Section,means any improved real property, as defined in subsection (a)(2) above, being developed for sale to individual homeowners,where the construction of the residencep upon such property is not substantially complete at the time of the sale. 6 (b) Exclusions. (1) In cases involving reconstruction contracting,the speculative builder may exclude fromross income the prior value allowed for reconstruction contracting g �n determining his taxable gross income, as provided by Regulation. (2) Neither the cost nor the fair market value of the land which constitutes part of the improved real roe P property rty sold may be excluded or deducted from gross income subject to the tax imposed by this Section. (3) (Reserved) (4) A speculative builder may exclude gross income from the sale of partially improved roved residential real property as defined in (a)(4) above to another speculative builder onlyif all of the following conditions are satisfied: (A) The speculative builder purchasing the partially improved residential realro e P P rtY has a valid Town privilege license for construction contracting as a speculative builder; and (B) At the time of the transaction, the purchaser provides the seller with aro eri P P Y completed written declaration that the purchaser assumes liability for and will pay all privilege taxes which would otherwise be due the Town at the time of sale of the partially improved residential real property; and (C) The seller also: (i) maintains proper records of such transactions in a manner similar to the requirements provided in this chapter relating to sales for resale; and (ii) retains a copy of the written declaration provided by the buyer for the transaction; and (iii) is properly licensed with the Town as a speculative builder and provides the Town with the written declaration attached to the Town privilege tax return where he claims the exclusion. (c) Tax liability for speculative builders occurs at close of escrow or transfer of title, whichever occurs earlier, and is subject to the FOLLOWING provisions , relating to EXEMPTIONS, deductions and tax credits: : (1) EXEMPTIONS. (A) THE GROSS PROCEEDS OF SALES OR GROSS INCOME ATTRIBUTABLE TO THE PURCHASE OF MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY THAT IS EXEMPT FROM OR DEDUCTIBLE FROM PRIVILEGE OR USE TAX UNDER: (i) SECTION 8A-465, SUBSECTIONS (g)AND (p) (ii) (RESERVED) SHALL BE EXEMPT OR DEDUCTIBLE, RESPECTIVELY, FROM THE TAX IMPOSED BY THIS SECTION. (B) THE GROSS PROCEEDS OF SALES OR GROSS INCOME RECEIVED FROM A CONTRACT FOR THE CONSTRUCTION OF AN ENVIRONMENTALLY CONTROLLED FACILITY FOR THE RAISING OF POULTRY FOR THE PRODUCTION OF EGGS AND THE SORTING, OR COOLING AND PACKAGING OF EGGS SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER THIS SECTION. (C) THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED FROM THE INSTALLATION,ASSEMBLY,REPAIR OR MAINTENANCE OF CLEAN ROOMS THAT ARE DEDUCTED FROM THE TAX BASE OF THE RETAIL CLASSIFICATION PURSUANT TO SECTION 8A-465,SUBSECTION(g)SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER THIS SECTION. (D) THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED FROM A CONTRACT ENTERED INTO WITH A PERSON WHO IS ENGAGED IN THE COMMERCIAL PRODUCTION OF LIVESTOCK,LIVESTOCK PRODUCTS OR AGRICULTURAL, HORTICULTURAL, VITICULTURAL OR FLORICULTURAL CROPS OR PRODUCTS IN THIS STATE FOR THE CONSTRUCTION, 7 ALTERATION, REPAIR, IMPROVEMENT, MOVEMENT, WRECKING OR DEMOLITION OR ADDITION TO OR SUBTRACTION FROM ANY BUILDING, HIGHWAY, ROAD, EXCAVATION, MANUFACTURED BUILDING OR OTHER STRUCTURE,PROJECT,DEVELOPMENT OR IMPROVEMENT USED DIRECTLY AND PRIMARILY TO PREVENT,MONITOR,CONTROL OR REDUCE AIR,WATER OR LAND POLLUTION SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER THIS SECTION. (2) DEDUCTIONS. (A) ALL AMOUNTS SUBJECT TO THE TAX SHALL BE ALLOWED A DEDUCTION IN THE AMOUNT OF THIRTY-FIVE PERCENT(35%). (B) THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED FROM THE INSTALLATION, ASSEMBLY, REPAIR OR MAINTENANCE OF INCOME-PRODUCING CAPITAL EQUIPMENT,AS DEFINED IN SECTION 8A-110, THAT DOES NOT BECOME A PERMANENT ATTACHMENT TO A BUILDING, HIGHWAY, ROAD, RAILROAD, EXCAVATION OR MANUFACTURED BUILDING OR OTHER STRUCTURE, PROJECT, DEVELOPMENT OR IMPROVEMENT SHALL BE DEDUCTED FROM THE TAX IMPOSED BY THIS SECTION. IF THE OWNERSHIP OF THE REALTY IS SEPARATE FROM THE OWNERSHIP OF THE INCOME-PRODUCING CAPITAL EQUIPMENT, THE DETERMINATION AS TO PERMANENT ATTACHMENT SHALL BE MADE AS IF THE OWNERSHIP WAS THE SAME. THE DEDUCTION PROVIDED IN THIS PARAGRAPH DOES NOT INCLUDE GROSS PROCEEDS OF SALES OR GROSS INCOME FROM THAT PORTION OF ANY CONTRACTING ACTIVITY WHICH CONSISTS OF THE DEVELOPMENT OF, OR MODIFICATION TO, REAL PROPERTY IN ORDER TO FACILITATE THE INSTALLATION, ASSEMBLY, REPAIR, MAINTENANCE OR REMOVAL OF THE INCOME-PRODUCING CAPITAL EQUIPMENT. FOR PURPOSES OF THIS PARAGRAPH, "PERMANENT ATTACHMENT MEANS AT LEAST ONE OF THE FOLLOWING: (i) TO BE INCORPORATED INTO REAL PROPERTY. (ii) TO BECOME SO AFFIXED TO REAL PROPERTY THAT IT BECOMES PART OF THE REAL PROPERTY. (iii) TO BE SO ATTACHED TO REAL PROPERTY THAT REMOVAL WOULD CAUSE SUBSTANTIAL DAMAGE TO THE REAL PROPERTY FROM WHICH IT IS REMOVED. (3) TAX CREDITS. THE FOLLOWING TAX CREDITS ARE AVAILABLE TO OWNER-BUILDERS OR SPECULATIVE BUILDERS, NOT TO EXCEED THE TAX LIABILITY AGAINST WHICH SUCH CREDITS APPLY, PROVIDED SUCH CREDITS ARE DOCUMENTED TO THE SATISFACTION OF THE TAX COLLECTOR: (A) A TAX CREDIT EQUAL TO THE AMOUNT OF TOWN PRIVILEGE OR USE TAX, OR THE EQUIVALENT EXCISE TAX, PAID DIRECTLY TO A TAXING JURISDICTION OR AS A SEPARATELY ITEMIZED CHARGE PAID DIRECTLY TO THE VENDOR WITH RESPECT TO THE TANGIBLE PERSONAL PROPERTY INCORPORATED INTO THE SAID STRUCTURE OR IMPROVEMENT TO REAL PROPERTY UNDERTAKEN BY THE OWNER-BUILDER OR SPECULATIVE BUILDER. (B) A TAX CREDIT EQUAL TO THE AMOUNT OF PRIVILEGE TAXES PAID TO THIS TOWN, OR CHARGED SEPARATELY TO THE SPECULATIVE BUILDER, BY A CONSTRUCTION CONTRACTOR,ON THE GROSS INCOME DERIVED BY SAID PERSON FROM THE CONSTRUCTION OF ANY IMPROVEMENT TO THE REAL PROPERTY. (C) NO CREDITS PROVIDED HEREIN MAY BE CLAIMED UNTIL SUCH TIME THAT THE GROSS INCOME AGAINST WHICH SAID CREDITS APPLY IS REPORTED. 8 Section 4. Section 8A-417 of the Tax Code of the Town of Oro Valley is amended to read: Sec. 8A-417. Construction contracting: owner-builders who are not speculative builders. (a) At the expiration of twenty-four (24) months after improvement to the propertyis substantially complete, the tax liability for an owner-builder who is not a speculative builder shall be at an amount equal to two percent (2%) of: (1) the gross income from the activity of construction contracting upon the real property in P rtY question which was realized by those construction contractors to whom the owner-builder provided written declaration that they were not responsible for the taxes as prescribed in Subsection 8A-415(c)(2); and (2) the purchase of tangible personal property for incorporation into any improvement to real property, computed on the sales price. (b) The tax liability of this Section is subject to the FOLLOWING provisions , relating to EXEMPTIONS, deductions and tax credits: : (1) EXEMPTIONS. (A) THE GROSS PROCEEDS OF SALES OR GROSS INCOME ATTRIBUTABLE TO THE PURCHASE OF MACHINERY, EQUIPMENT OR OTHER TANGIBLE PERSONAL PROPERTY THAT IS EXEMPT FROM OR DEDUCTIBLE FROM PRIVILEGE OR USE TAX UNDER: (i) SECTION 8A-465, SUBSECTIONS (g)AND (p) (ii) (RESERVED) SHALL BE EXEMPT OR DEDUCTIBLE, RESPECTIVELY, FROM THE TAX IMPOSED BY THIS SECTION. (B) THE GROSS PROCEEDS OF SALES OR GROSS INCOME RECEIVED FROM A CONTRACT FOR THE CONSTRUCTION OF AN ENVIRONMENTALLY CONTROLLED FACILITY FOR THE RAISING OF POULTRY FOR THE PRODUCTION OF EGGS AND THE SORTING, OR COOLING AND PACKAGING OF EGGS SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER THIS SECTION. (C) THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED FROM THE INSTALLATION,ASSEMBLY,REPAIR OR MAINTENANCE OF CLEAN ROOMS THAT ARE DEDUCTED FROM THE TAX BASE OF THE RETAIL CLASSIFICATION PURSUANT TO SECTION 8A-465,SUBSECTION(g)SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER THIS SECTION. (D) THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED FROM A CONTRACT ENTERED INTO WITH A PERSON WHO IS ENGAGED IN THE COMMERCIAL PRODUCTION OF LIVESTOCK,LIVESTOCK PRODUCTS OR AGRICULTURAL, HORTICULTURAL, VITICULTURAL OR FLORICULTURAL CROPS OR PRODUCTS IN THIS STATE FOR THE CONSTRUCTION, ALTERATION, REPAIR, IMPROVEMENT, MOVEMENT, WRECKING OR DEMOLITION OR ADDITION TO OR SUBTRACTION FROM ANY BUILDING, HIGHWAY, ROAD, EXCAVATION, MANUFACTURED BUILDING OR OTHER STRUCTURE,PROJECT,DEVELOPMENT OR IMPROVEMENT USED DIRECTLY AND PRIMARILY TO PREVENT,MONITOR,CONTROL OR REDUCE AIR,WATER OR LAND POLLUTION SHALL BE EXEMPT FROM THE TAX IMPOSED UNDER THIS SECTION. (2) DEDUCTIONS. (A) ALL AMOUNTS SUBJECT TO THE TAX SHALL BE ALLOWED A DEDUCTION IN THE AMOUNT OF THIRTY-FIVE PERCENT(35%). (B) THE GROSS PROCEEDS OF SALES OR GROSS INCOME THAT IS DERIVED FROM THE INSTALLATION, ASSEMBLY, REPAIR OR MAINTENANCE OF INCOME-PRODUCING CAPITAL EQUIPMENT,AS DEFINED IN SECTION 8A-110, THAT DOES NOT BECOME A PERMANENT ATTACHMENT TO A BUILDING, HIGHWAY, ROAD, RAILROAD, EXCAVATION OR MANUFACTURED BUILDING 9 OR OTHER STRUCTURE, PROJECT, DEVELOPMENT OR IMPROVEMENT SHALL BE DEDUCTED FROM THE TAX IMPOSED BY THIS SECTION. IF THE OWNERSHIP OF THE REALTY IS SEPARATE FROM THE OWNERSHIP OF THE INCOME-PRODUCING CAPITAL EQUIPMENT, THE DETERMINATION AS TO PERMANENT ATTACHMENT SHALL BE MADE AS IF THE OWNERSHIP WAS THE SAME. THE DEDUCTION PROVIDED IN THIS PARAGRAPH DOES NOT INCLUDE GROSS PROCEEDS OF SALES OR GROSS INCOME FROM THAT PORTION OF ANY CONTRACTING ACTIVITY WHICH CONSISTS OF THE DEVELOPMENT OF, OR MODIFICATION TO, REAL PROPERTY IN ORDER TO FACILITATE THE INSTALLATION, ASSEMBLY, REPAIR, MAINTENANCE OR REMOVAL OF THE INCOME-PRODUCING CAPITAL EQUIPMENT. FOR PURPOSES OF THIS PARAGRAPH, "PERMANENT ATTACHMENT"MEANS AT LEAST ONE OF THE FOLLOWING: (i) TO BE INCORPORATED INTO REAL PROPERTY. (ii) TO BECOME SO AFFIXED TO REAL PROPERTY THAT IT BECOMES PART OF THE REAL PROPERTY. (iii) TO BE SO ATTACHED TO REAL PROPERTY THAT REMOVAL WOULD CAUSE SUBSTANTIAL DAMAGE TO THE REAL PROPERTY FROM WHICH IT IS REMOVED. (3) TAX CREDITS. THE FOLLOWING TAX CREDITS ARE AVAILABLE TO OWNER-BUILDERS AND SPECULATIVE BUILDERS, NOT TO EXCEED THE TAX LIABILITY AGAINST WHICH SUCH CREDITS APPLY, PROVIDED SUCH CREDITS ARE DOCUMENTED TO THE SATISFACTION OF THE TAX COLLECTOR: (A) A TAX CREDIT EQUAL TO THE AMOUNT OF TOWN PRIVILEGE OR USE TAX, OR THE EQUIVALENT EXCISE TAX, PAID DIRECTLY TO A TAXING JURISDICTION OR AS A SEPARATELY ITEMIZED CHARGE PAID DIRECTLY TO THE VENDOR WITH RESPECT TO THE TANGIBLE PERSONAL PROPERTY INCORPORATED INTO THE SAID STRUCTURE OR IMPROVEMENT TO REAL PROPERTY UNDERTAKEN BY THE OWNER-BUILDER OR SPECULATIVE BUILDER. (B) A TAX CREDIT EQUAL TO THE AMOUNT OF PRIVILEGE TAXES PAID TO THIS TOWN, OR CHARGED SEPARATELY TO THE SPECULATIVE BUILDER, BY A CONSTRUCTION CONTRACTOR,ON THE GROSS INCOME DERIVED BY SAID PERSON FROM THE CONSTRUCTION OF ANY IMPROVEMENT TO THE REAL PROPERTY. (C) NO CREDITS PROVIDED HEREIN MAY BE CLAIMED UNTIL SUCH TIME THAT THE GROSS INCOME AGAINST WHICH SAID CREDITS APPLY IS REPORTED. (c) The limitation period for the assessment of taxes imposed by this Section is measured based upon when such liability is reportable, that is, in the reporting period that encompasses the twenty-fifth (25th)month after said unit or project was substantially complete. Interest and penalties,asP rovided in Section 8A-540, will be based on reportable date. (d) (Reserved) Section 5. Section 8A-418 of the Tax Code of the Town of Oro Valley is amended to read: Sec. 8A-418 (RESERVED) • . •. . • .. , _ . . .. . . . .• • . ••• • • •• • • • • • • •• • •• • • •• ••• • • •• • •• • 10 • • • ••• • • •• • ••• • • - _ - • •• • • • : ••• • • • •• • • • •• • • • - • • • w• • • • •• • • • dr • • •• • • • • •IP. . • ••• •• • • • • , e• • • • • • • • • • ••• • • ••• ••• • • • • • • • • • • •• • • • • property.: • • Section 6. Section 8A-444 of the Tax Code of the Town of Oro Valleyis amended to • read: Sec. 8A-444. Hotels. The tax rate shall be at an amount equal to two percent(2%)of theross income from the business ss activity upon every person engaging or continuing in the business of operating a hotel charging for lodgingand/or lodging space furnished to any: (a) Person. (b) (Reserved) (c) INCOME DERIVED FROM INCARCERATING OR DETAINING PRISONERS WHO ARE UNDER THE JURISDICTION OF THE UNITED STATES, THIS STATE OR ANY OTHER STATE OR A POLITICAL SUBDIVISION OF THIS STATE OR OF ANY OTHER STATE IN A PRIVATELY OPERATED PRISON,JAIL OR DETENTION FACILITY IS EXEMPT FROM THE TAX IMPOSED BY THIS SECTION. Section 7. Section 8A-445 of the Tax Code of the Town of Oro Valley is amended to read: Sec. 8A-445. Rental, leasing, and licensing for use of real property. (a) The tax rate shall be at an amount equal to two percent(2%)of theross income from the business ss activity upon every person engaging or continuing in the business of leasing or rentingreal property located within the Town for a consideration,to P P � the tenant in actual possession,or the licensing for use of real property to the final licensee located within the Town for a consideration including improvements, rights, or interest in such property; provided any d further that: (1) Payments made by the lessee to, or on behalf of, the lessor for property taxes, repairs,P ' or improvements are considered to be part of the taxable gross income. (2) Charges for such items as telecommunications, utilities, pet fees, or maintenance are considered to be part of the taxable gross income. (3) However, if the lessor engages in telecommunication activity, as evidenced byinstalling individual metering equipment and bybillingeach h tenant based upon actual usage, such activity is taxable under Section 8A-470. b) If individual utility meters have been installed for each tenant and the lessor separately charges each P Y 9 single tenant for the exact billing from the utility company, such charges are exempt. (c) Charges by a qualifying hospital, qualifying community health center or a qualifying in health care organization to patients of such facilities for use of rooms or other real property during the course of 11 their treatment by such facilities are exempt. (d) Charges for joint pole usage by a person engaged in the business of providing or furnishing utility or telecommunication services to another person engaged in the business of providing or furnishing utility or telecommunication services are exempt from the tax imposed by this Section. (e) Exempt from the tax imposed by this Section is gross income derived from the rental, leasing, or licensing for use of real property to a qualifying hospital, qualifying community health center or a qualifying health care organization,except when the property so rented, leased,or licensed is for use in activities resulting in gross income from unrelated business income as that term is defined in 26 U.S.C. Section 512. (f) A person who has less than three (3) apartments, houses, trailer spaces, or other lodging spaces rented, leased or licensed or available for rent, lease, or license within the State and no units of commercial property for rent, lease, or license within the State, is not deemed to be in the rental business, and is therefore exempt from the tax imposed by this section on such income. However, a person who has one(1)or more units of commercial property is subject to the tax imposed by this section on rental,lease and license income from all such lodging spaces and commercial units of real estate even though said person may have fewer than three (3) lodging spaces. (g) (Reserved) (h) Except as may be provided in another section of this chapter, the tax prescribed by this section shall not include gross income from the rental, leasing or licensing of lodging or lodging space to an individual who resides therein. (i) (Reserved) (j) Exempt from the tax imposed by this Section is gross income derived from the activities taxable under Section 8A-444 of this code. (k) (Reserved) (I) (Reserved) (m) Notwithstanding the other provisions of this section, the tax imposed by this section does not apply to the rental, leasing or licensing for use of commercial property. (n) Notwithstanding the provisions of Section 8A-200(b), the fair market value of one (1) apartment, in an apartment complex provided rent free to an employee of the apartment complex is not subject to the tax imposed by this Section. For an apartment complex with more than fifty (50) units, an additional apartment provided rent free to an employee for every additional fifty (50) units is not subject to the tax imposed by this Section. (o) INCOME DERIVED FROM INCARCERATING OR DETAINING PRISONERS WHO ARE UNDER THE JURISDICTION OF THE UNITED STATES, THIS STATE OR ANY OTHER STATE OR A POLITICAL SUBDIVISION OF THIS STATE OR OF ANY OTHER STATE IN A PRIVATELY OPERATED PRISON,JAIL OR DETENTION FACILITY IS EXEMPT FROM THE TAX IMPOSED BY THIS SECTION. Section 8. Section 8A-450 of the Tax Code of the Town of Oro Valley is amended to read: Sec. 8A-450. Rental, leasing, and licensing for use of tangible personal property. (a) The tax rate shall be at an amount equal to two percent(2%)of the gross income from the business 12 activity upon every person engaging or continuingin the business of leasing, renting tangible personal roe licensing for use, or property rty for a consideration, including that which is semi-permanentlyor 9 permanently installed within the Town as provided byRegulation. (b) Special provisions relating to long-term motor vehicle leases. A of twenty-four lease transaction involving a motor vehicle for a minimum periodty four(24)months shall be considered to have occurred at the location of the motor vehicle dealership,rather than the location of thelace of P business of the lessor, even if the lessor's interest in the lease and its proceeds are sold, transferred, or otherwise assigned to a lease financing institution; provided further that the cityortown where � such motor vehicle dealership is located levies a Privilege Tax or an equivalent excise tax upon the transaction. (c) Gross income derived from the following transactions shall be fr exempt by this Section: p om Privilege Taxes imposed (1) rental, leasing, or licensing for use of tangible personal property to persons engaged or continuing in the business of leasing, licensing for use, or rental of suchroe P P rtY. (2) rental, leasing,or licensing for use of tangible personal property that is semi- permanently or permanently installed within another city or town that levies an equivalent excise tax on the transaction. (3) rental, leasing, or licensing for use of film, tape, or slides to a theater or other person taxed under Section 8A-410, or to a radio station, television station, or subscription television system. (4) rental, leasing, or licensing for use of the following: (A) prosthetics. (B) income-producing capital equipment. (C) mining and metallurgical supplies. These exemptions include the rental, leasing, or licensingfor of tangible use personal property which, if it had been purchased instead of leased, rented,or licensed bythe or licensee,would qualify as income-producingcapital equipment lessee pormining and metallurgical supplies. (5) rental, leasing, or licensing for use of tangible personal property to a qualifying hospital, qualifying community health center or a qualifying health care organization,except when p the property so rented, leased, or licensed is for use in activities resulting inross income from unrelated business income as that term is defined ing 26 U.S.C.Section 512 or rental,leasing, or licensing for use of tangible personal property in this State by organization that has qualified under Section a nonprofit charitable 501(c)(3)of the United States Internal Revenue Code and that engages in and uses such property exclusivelyfor training,job I rehabilitation programs or testingfor mentally placement or or physically handicapped persons. (6) separately billed charges for delivery, repair,and/or maintenance Regulation. a ce as provided by (7) charges for joint pole usage by a person engaged in the business ofr p oviding or furnishing utility or telecommunication services to another person engaged in the business of or furnishing utility or telecommunication servicesproviding services. (8) the gross income from coin-operated washing, drying, and cleaning dry machines, or from coin-operated car washing machines. This exemption shall nota I to suppliers distributors renting,leasing,or licensingfor use of such apply PP or equipment to persons engaged in the operation of coin-operated washing, drying, dry cleaning, or car washing establishments. (9) rental, leasing, or licensing of aircraft that would qualifyas aircraft acquired the State, as q d for use outside prescribed by Regulation, if such rental, leasing, or licensing had been a sale. (10) RENTAL, LEASING AND LICENSING FOR USE OF MOTOR VEHICLES THAT USE ALTERNATIVE FUEL AS DEFINED IN A.R.S. SECTION 43-1086 ON OR AFTER MAY 5, 1999. 13 Section 9. Section 8A-460 of the Tax Code of the Town of Oro Valleyis amended : to read. Sec. 8A-460. Retail sales: measure of tax; burden of proof; exclusions. (a) The tax rate shall be at an amount equal to two percent(2%)of theross income from the 9 business activity upon every person engaging or continuing in the business of selling tangible personal property at retail. g (b) The burden of proving that a sale of tangible personal propertyis not a taxable retail sale shall al be upon the person who made the sale. (c) Exclusions. For the purposes of this Chapter, sales of tangible personal propertyshall not include: (1) sales of stocks, bonds, options, or other similar materials. (2) sales of lottery tickets or shares pursuant to Article I, Chapter 5, Title 5, Arizona Revised Statutes. (3) sales of platinum, bullion, or monetized bullion, except minted or manufactured coins transferred or acquired primarily for their numismatic value as prescribed by Regulation. (4) gross income derived from the transfer of tangible personal propertywhich is specifically y included as the gross income of a business activity upon which another Section of this Article imposes a tax, shall be considered gross income of that business activity, and are not includable as gross income subject to the tax imposed by this Section. (5) sales by professional or personal service occupations where such sales are inconsequential elements of the service provided. q (d) (Reserved) (e) When this Town and another Arizona city or town with an equivalent excise tax could claim nexus for taxing a retail sale,the city or town where the permanent business location of the seller at which the order was received shall be deemed to have precedence, and for the purposes of this Chapter such 9 city or town has sole and exclusive right to such tax. P (f) The appropriate tax liability for any retail sale where the order is received ataermanent business s location of the seller located in this Town or in an Arizona city or town that levies an equivalent excise tax shall be at the tax rate of the cityor town of q such seller's location. (g) RETAIL SALES OF PREPAID CALLING CARDS OR PREPAID AUTHORIZATION NUMBERS FOR TELECOMMUNICATIONS SERVICES, INCLUDING SALES OF REAUTHORIZATION OF A PREPAID CARD OR AUTHORIZATION NUMBER,ARE SUBJECTTO TAX UNDER THIS SECTION. Section 10. Section 8A-465 of the Tax Code of the Town of Oro Valley is amended to read: Sec. 8A-465. Retail sales: exemptions. Income derived from the following sources is exempt from the tax imposed by Section 14-460: (a) sales of tangible personal property to a person regularly engaged in the business of selling such property. (b) out-of-Town sales or out-of-State sales. (c) charges for delivery, installation, or other direct customer services as rescribed byRegulation. P9 (d) charges for repair services as prescribed by Regulation, when separatelycharged and separately maintained in the books and records of the taxpayer. g P y 14 (e) sales of warranty, maintenance, and service contracts, when separately charged and separately maintained in the books and records of the taxpayer. (f) sales of prosthetics. (g) sales of income-producing capital equipment. (h) sales of rental equipment and rental supplies. (i) sales of mining and metallurgical supplies. 0) sales of motor vehicle fuel and use fuel which are subject Chapter 16,Title 1 to a tax imposed under the provisions of Article I or ll, Cha P28,Arizona Revised Statutes;or sales of use fuel to a holder of a valid single trip use fuel tax permit issued under A.R.S.Section 28-5739,or sales of natural petroleum gas used to propel a motor vehicle. gas or liquefied (k) sales of tangible personal property to a construction contractor who holds a valid Privilege Tax License for engaging or continuing in the business of construction contracting where the tangible personal property sold is incorporated into any structure or improvement to real r construction contracting activity. P property as part of (I) sales of motor vehicles to nonresidents of this State for use outside s de this State if the vendor ships or delivers the motor vehicle to a destination outside this State. (m) sales of tangible personal property which directlyenters into component part of a product sold in and becomes an ingredient or the regular course of the business of job printing,manufacturing, personal or publication of newspapers, magazines, or other periodicals. Tangible g consumed or used up in a manufacturing, g P al property which is job printing, publishing, or production process is not an ingredient nor component part of a product. (n) (Reserved) (1) (Reserved) (2) (Reserved) (o) sales to hotels,bars,restaurants,dining cars,lunchrooms boarding of articles consumed as food, drink, � houses,or similar establishments or condiment, whether simple, mixed, or compounded, where such articles are customarily prepared or served to patrons for consumption on where the purchaser is properly licensed P or off the premises, P Y and paying a tax under Section 8A-455 or the equivalent excise tax upon such income. (p) sales of tangible personal property to a qualifying hospital, qualifying g community health center or aquaiifin health care organization, except when the propertysold is for use in activities resulting in gross income from unrelated business income as that term is defined in 26 U.S.C. Section 512 or sales of tangible personal property purchased in this State by a nonprofit charitable organization has qualified under Section 501 c 3 of the UnitedP that ( )( ) States Internal Revenue Code and that engages in and uses such roe g property rty exclusively for training,job placement or rehabilitation programs or testin for mentally or physically handicapped persons. g (q) sales of food for home consumption. (r) sales of the following to persons engaging or continuing in the business of farming, ranching, or feeding livestock, poultry or ratites: (1) seed, fertilizer, fungicides, seed treating chemicals, and other similar chemicals. (2) feed for livestock,poultry or ratites, including salt,vitamins,and other additives (3) livestock, poultry or ratites purchased or to such feed. raised for slaughter, but not including livestock purchased or raised for production or use, such as milch cows, breeding bulls, laying hens, 15 riding or work horses. (4) (Reserved) This exemption shall not be construed to include machinery, e ui replacement equipment, fuels, lubricants, pharmaceuticals, repair and re p t parts, or other items used or consumed in the running, maintenance, or repair of machinery, equipment, buildings, or structures used or business of farming, ranching, or feeding livestock,of livest , poultry or ratites. consumed in the (s) sales of groundwater measuring devices required byA.R.S. Section 4 - q 5 604. (t) sales of paintings,sculptures or similar works of fine art, provided that such works of fine art are sold by the original artist; and provided further that sales of"art creations", such a glasswork, pottery, woodwork, metalwork f s jewelry, macrame, urniture, and clothing, when such "art creations"have a dual purpose, both aesthetic and utilitarian, are not exempt,whether sold bythe artist or by another. (u) sales of aircraft acquired for use outside the State, asrescribed byRegulation. (v) sales of food products by producers as provided for byA.R.S. Sections 3-561, 3-562 _ and 3 563. (w) (Reserved) (x) sales of food and drink to a properly licensed restaurant whichrovides such f for their p food and drink without monetary charge to its employees heir own consumption on the premises during such employees' hours of employment. (y) (Reserved) (z) gross income received for tangible personal propertyconsistingof manufactured beingsubjected to items destroyed by destructive stress, strain or similar testing, for the purpose of developing engineering information or for the purpose of qualitycontrol, but onlytoP d would otherwisethe extent that a sale of said property be exempt by the provisions of this Chapter. (aa) the sale of tangible personal property used in remediation contracting e as defined in Section 8A-100 i and Regulation 8A-100.5. (bb) sales of materials that are purchased by or for publicly funded libraries including school district libraries, charter school libraries, community college libraries, state university libraries or federal, state, county or municipal use by the public as follows: (1) printed or photographic materials. (2) electronic or digital media materials. (cc) sales of food, beverages, condiments and accessories used for serving food and beverages to a commercial airline,as defined in A.R.S. §42-5061(A)(50), that serves the food and beverages e,foronsum � 9 s to its passengers,without additional char 9 consumption in flight. For the purposes of this subsection, "accessories"means paper plates,plastic eating utensils,napkins,paper cups,drinking straws,or other disposable containers, or other items which facilitate the consumption of the food. (dd) in computing the tax base in the case of the sale or transfer of wireless telecommunication equipment as an inducement to a customer to enter into or continue a contract for telecommunication services that are taxable under Section 8A-470,gross proceeds of sales orross income does not include sales commissions or other compensation receivedg c ude any by the retailer as a result of the customer entering into or continuing a contract for the telecommunications services. (ee) for the purposes of this Section, a sale of wireless telecommunication equipment holds the equipment for sale or transfer to a customerto a person who as an inducement to enter into or continue a contract for telecommunication services that are taxable under Section 8A-470 is considered to a sale for resale in the regular course of business. be 16 (ff) sales of alternative fuel as defined in A.R.S. 1-215, to a usedi Department of § oil burner who has received a p Environmental Quality permit to burn used oil or used oil fuel under A.R.S. or§49-480. §49-426 (gg) sales of food, beverages,condiments and accessories to aublic educational of the provisions of Title 15, Arizonap entity, pursuant to any Revised Statutes; to the extent such items are to be prepared or served to individuals for consumption on the premises of a public educational entity during school hours. For the purposes of this subsection,"accessories"means paper plates,plastic eating utensils, napkins, paper cups, drinking straws, paper sacks or other disposable containers, or tion of the foo Pother items which facilitate the consumption d. (hh) sales of personal hygiene items to a person engaged in the business of and subject to tax under Section 8A-444 of this code if the tangible personal propertyis furnishedwithout additional ditiona! charge to and intended to be consumed by the person during his occupancy. (ii) FOR THE PURPOSES OF THIS SECTION, THE DIVERSION OF GAS FROM A PIPELINE BY A PERSON ENGAGED IN THE BUSINESS OF OPERATING A NATURAL OR ARTIFICIAL GAS PIPELINE, FOR THE SOLE PURPOSE OF FUELING COMPRESSOR EQUIPMENT PRESSURIZE THE PIPELINE, IS NOT TO A SALE OF THE GAS TO THE OPERATOR OF THE PIPELINE. (jj) SALES OF FOOD, BEVERAGES, CONDIMENTS AND ACCESSORIES TO A NONPROFIT CHARITABLE ORGANIZATION THAT HAS QUALIFIED AS AN EXEMPT ORGANIZATION UNDER 26 U.S.0 SECTION 501(C)(3) AND REGULARLY SERVES MEALS TO THE NEEDY AND INDIGENT ON A CONTINUING BASIS AT NO COST. FOR THE PURPOSES OF THIS SUBSECTION, "ACCESSORIES" MEANS PAPER PLATES, PLASTIC EATING UTENSILS, NAPKINS, PAPER CUPS, DRINKING STRAWS, PAPER SACKS OR OTHER DISPOSABLE CONTAINERS, OR OTHER ITEMS WHICH FACILITATE THE CONSUMPTION OF THE FOOD. (kk) SALES OF MOTOR VEHICLES THAT USE ALTERNATIVE FUEL AS DEFINED IN A. 43-1086 ON OR AFTER MAY 5, 999. 1 R.S.SECTION Section 11. Section 8A-470 of the Tax Code of the Town of Oro Valleyis amended • to read. Sec. 8A-470. Telecommunication services. (a) The tax rate shall be at an amount equal to zero percent0% income from)of the gross the business activity upon every p :on engaging or continuing in the business of providingtelecommunication services to consumers within this Town. (1) Telecommunication services shall include: (A) two-way voice,sound,and/or video communication over a communications channel. (B) one-way voice, sound, and/or video transmission or relayover a channel. communications (C) facsimile transmissions. (D) providing relay or repeater service. (E) providing computer interface services over a communications channel. (F) time-sharing activities with a computer accomplished through the use of a communications channel. (2) Gross income from the business activity of providing telecommunication services to consumers within this Town shall include: (A) all fees for connection to a telecommunication system. (B) toll charges, charges for transmissions, and charges for other telecommunications services;provided that such charges relate to transmissions originating in the Town and terminating in this State. (C) fees charged for access to or subscription to or membership in a telecommunication 17 system or network. (D) charges for monitoring services relating to a securiorbur burglar system 9 y m located within the Town where such system transmits or receives signals or data over a communications channel. (b) Resale telecommunication services. Gross income from sales of telecommunication services to another provider of telecommunication services for the purpose ofrovidin thepurchaser's customers with such service shall be exemptp g from the tax imposed by this Section; 7rovided, however, that such purchaser is properly licensed by the Town to engage in such businet (c) Interstate transmissions. Charges by a provider of telecommunication services for transmissions originating in the Town and terminating outside the State are exempt from the tax imposed Section. P P by this (d) (Reserved) (e) However, gross income from the providing of telecommunication services by a cable television system,as such system is defined in A.R.S. Section 9-505, shall be exempt from the tax imposed this Section. P by (f) PREPAID CALLING CARDS. TELECOMMUNICATIONS SERVICES PURCHASED WITH A PREPAID CALLING CARD THAT ARE TAXABLE UNDER SECTION 8A-460 ARE EXEMPT FROM THE TAX IMPOSED UNDER THIS SECTION. Section 12. Section 8A-475 of the Tax Code of the Town of Oro Valley is amended to read: Sec. 8A-475. Transporting for hire. The tax rate shall be at an amount equal to two percent(2%)of the gross income from the business activity upon every person engaging or continuing in the business of providing the following forms of transportation for hire from this Town to another point within the State: (a) transporting of persons or property by railroad-;PROVIDED,HOWEVER,THAT THE TAX IMPOSED BY THIS SUBSECTION SHALL NOT AP PLY TO TRANSPORTING FREIGHT OR PROPERTY FOR HIRE BY A RAILROAD OPERATING EXCLUSIVELY IN THIS STATE IF THE TRANSPORTATION COMPRISES A PORTION OF A SINGLE SHIPMENT OF FREIGHT OR PROPERTY, INVOLVING MORE THAN ONE RAILROAD, EITHER FROM A POINT IN THIS STATE TO A POINT OUTSIDE THIS STATE OR FROM A POINT OUTSIDE THIS STATE TO A POINT IN THIS STATE. FOR PURPOSES OF THIS PARAGRAPH, "A SINGLE SHIPMENT MEANS THE TRANSPORTATION THAT BEGINS AT THE POINT ATWHICH ONE OF THE RAILROADS FIRST TAKES POSSESSION OF THE FREIGHT OR PROPERTY AND CONTINUES UNTIL THE POINT AT WHICH ONE OF THE RAILROADS RELINQUISHES POSSESSION OF THE FREIGHT OR PROPERTY TO A PARTY OTHER THAN ONE OF THE RAILROADS. (b) transporting of oil or natural or artificial gas through pipe or conduit. (c) transporting of property by aircraft. (d) transporting of persons or property by motor vehicle,including towingand the operation ofprivate lines, as such are defined in Article VII, Chapter P car 14, Title 42, Arizona Revised Statutes; provided, however, that the tax imposed by this subsection shall not apply to: (1) gross income subject to the tax imposed by Article IV, Chapter 16,Title 28,Arizona Revised Statutes. (2) gross income derived from the operation of a governmentally adopted and controlled transportation. to provide urban mass trans P . 18 (3) (Reserved) (4) (Reserved) Section 13. Section 8A-575 of the Tax Code of the Town of Oro Valley is amended to read: Sec. 8A-575. Judicial review. (a) Appeal of a State Board of Tax Appeals decision to the courts is A.R.S '3ection 42-124 are met. (b) (Reserved) (c) (Reserved) (d) (Reserved) (e) THE TOWN HAS THE BURDEN OF PROOF BY A PREPONDERANCE OF THE EVIDENCE IN ANY COURT PROCEEDING REGARDING ANY FACTUAL ISSUE RELEVANT TO ASCERTAINING THE TAX LIABILITY OF A TAXPAYER. THIS SUBSECTION DOES NOT ABROGATE ANY REQUIREMENT OF THIS CHAPTER THAT REQUIRES A TAXPAYER TO SUBSTANTIATE AN ITEM OF GROSS INCOME, EXCLUSION, EXEMPTION, DEDUCTION, OR CREDIT. THIS SUBSECTION APPLIES TO A FACTUAL ISSUE IF A PREPONDERANCE OF THE EVIDENCE DEMONSTRATES THAT: (1) THE TAXPAYER ASSERTS A REASONABLE DISPUTE REGARDING THE ISSUE. (2) THE TAXPAYER HAS FULLY COOPERATED WITH THE TAX COLLECTOR REGARDING THE ISSUE, INCLUDING PROVIDING WITHIN A REASONABLE PERIOD OF TIME, ACCESS TO AND INSPECTION OF ALL WITNESSES,INFORMATION AND DOCUMENTS WITHIN THE TAXPAYER'S CONTROL, AS REASONABLY REQUESTED BY COLLECTOR. THE TAX (3) THE TAXPAYER HAS KEPT AND MAINTAINED RECORDS AS REQUIRED BY THE TOWN. fe(f) The issuance of an adjusted or corrected assessment or notice of refund pursuant due to the taxpayer,where made by the Tax Collector p nt to the decision of the Hearing Officer, shall not be deemed an acquiescence by the Town or the Tax Collector in said decision, nor shall it constitute a bar estoppel to the institution of an action or counterclaim bythe Town to recover or any amounts claimed to be due to it by virtue of the original assessment. (f)(g) After the initiation of any action in the appropriate court byeitherparty,P rtY, the opposite party may file such counterclaim as would be allowed pursuant to the Arizona Rules of Civil Procedure. Section 14. Regulation 8A-100.4 of the Tax Code of the Town of Oro Valleyis amended to read: Reg. 8A-100.4. Out-of-Town/Out-of-State Sales: Sales to fnretiarts NATIVE AMERICANS. Sales to fnthatts NATIVE AMERICANS or tribal councils by vendors located within the Town sales within the Town, unless all of the following conditions exist: shall be deemed (1) The vendor has properly accounted for such sales, in a manner similar to the record keeping requirements for out-of-Town sales; and, (2) All of the following elements of the sale exist: (A) solicitation and placement of the order occurs on the reservation; and (B) delivery is made to the reservation; and (C) payment originatL from the reservation. 19 TOWN OF ORO VALLEY 7 COUNCIL COMMUNICATION MEETING DATE: NOVEMBER 17, 1999 TO: HONORABLE MAYOR& COUNCIL FROM David G. Hook, P.E., Water Utility Director SUBJECT: Invitation to Join Southern Arizona Water Users Association SUMMARY: On October 18, 1999 Oro Valley Water received a letter from the Southern Arizona Water Users Association (SAWUA) requesting that the Water Utility formally consider membership in the Association. The SAWUA is a voluntary non-profit association organized to discuss, analyze and recommend was to preserve and enhance y . the quality and quantity of Southern Arizona's water resources. The Association seeks members from municipal water providers, agricultural and mining water users, and others interested in working cooperatively to achieve their objectives. During the next few months, it is envisioned that the SAWUA will be actively involved in the following: • Provide a regular forum to discuss water issues important to membership and increase understanding among members of each individual member's perspective. • Remain active in ADWR's safe-yield task force and provide either support or differing views to that process. • Monitor proposed legislation and provide a unified voice from Southern Arizona on those legislative issues that would impact the members of the Association. • Provide an active presence and participation with Arizona Department of Water Resources, Central Arizona Water Conservation District, Arizona Water Banking Authority, Central Arizona Groundwater Replenishment District, Arizona Department of Environmental Quality and others as they develop rules, regulations and policies affecting water users. FISCAL IMPACT: The cost to participate in the Southern Arizona Water Users Association would be an initial fee of$2,800 due by 12/31/99 and an annual fee of$6,200 payable in two installments by March 31 and July 31 of each CY thereafter. The membership costs are proposed to be paid from the O`'WU Enterprise Fund, Membership & Subscriptions � line. Since the $5900 due this fiscal year is a unbudgeted expense, the over-expenditure of the M&S line will be compensated by the under-expenditure of several other O&M related line items and will not result in the over expenditure of the budgeted totals for O&M in the Enterprise fund. Expenditures for � p membership in the SAWUA for FY 2000/2001 will be presented in the OVWU budget proposal early nest year. ATTACHMENTS: 1. SAWUA letter of 10/18/99 2. SAWUA Fee Structure TOWN OF ORO VALLEY COUNCIL COMMUNICATION PAGE 2 of 2 RECOMMENDATIONS: Staff respectively recommends that the Mayor & Council approve the Town's membership participation and artici ation in the (SAWUA). SUGGESTED MOTION: The Town Council may wish to consider one of the following motions: I move to approve the membership and participation of the Town of Oro Valleyin the Southern Arizona Water s Association. Or I move to deny the membership and participation of the Town of Oro Valley in the Southern Arizona Water Users Association. Or I move to WOPft at r tility Dir, or /.1 &A 4 As Town Manager Southern Arizona Users October 18, 1999 David Hook Oro Valley Water Utility 1565 E. Rancho Vistoso Blvd., Suite A Oro Valley, AZ 85737 Re: Invitation to Join Southern Arizona Water Users Association Dear David: The Southern Arizona Water Users Association (SAWUA) is a voluntary non-profit association organized to discuss, analyze and recommend ways to preserve and enhance theualiand quantity tY q tY of Southern Arizona's water resources. The Association seeks members from municipal water providers, agricultural and mining water users, and others interested in working cooperatively to p Y achieve this objective. The Association believes its members should work together to exercise leadership and initiative to determine and encourage the most effective management of the region's sustainable supplies of quality water. The Southern Arizona Water Users Association formallyinvites to consider membershipin the Association. you During the next few months, it is envisioned that the Association will be actively involved in the following: • Provide a regular forum to discuss water issues important to membershipand increase understanding p e standing among members of each individual member's perspective. • Remainp active in ADWR's safe-yield task force and provide either support or differing views to that process. • Monitor proposed legislation and provide a unified voice from Southern Arizona on those legislative issues that would impact the members of the Association. • Provide an active presence and participation with Arizona Department of Water Resources, , Central Arizona Water Conservation District, Arizona Water Baking Authority, Central Arizona Groundwater Replenishment District, Arizona Department of EnvironmentalQtY uali and others as they develop rules, regulations and policies affecting water users. You or a designated representative are invited to serve on the Board of Directors to represent Oro ValleyWater Utility. Please � p find enclosed by-laws that provide information on membership requirements as well as fee schedule for members, which for Oro Valley Water Utility would be an • initial fee of$2,800 and annual fee of$6,200. We hope that you will accept this invitation by December 31, 1999 and become an activeartici an p p t in the Southern Arizona Water Users Association. Ifou should have anyquestions, please d Yo not hesitate to call Mark Stratton at 575-8100 or Brad DeSpain at 616-4908. Sincerely, 44,„,,oy 0. 1.41ejA,-,AllYdf Mark R. Stratton Brad D eSp ain Metro Water District Marana Water Department SOUTHERN ARIZONA WATER USERS ASSOCIATION FEE STRUCTURE Initial Fee for Full Members Municipal Providers A. Pumping annually more than 5,000 acre feet $2,800 B. Pumping annually 5,000 acre feet or less $1,400 Agriculture District&Entity A. Irrigation District $2,800 B. Individual Agriculture Entity $1,400 Mining, Industrial or Institutional Entity $2,800 Annual Due for Full Members Municipal Providers A. Pumping annually more than 5,000 acre feet $6,200 B. Pumping annually 5,000 acre feet or less $3,100 Agriculture District &Entity A. Imgation District $6,200 B. Individual Agriculture Entity $3,100 -- Mining, Industrial or Institutional Entity $6,200 Annual Due for Associate Members Individual Members $120 Firms, Entities, Companies, etc. $1,200 Fee Payment Schedule Initial Fee Due by December 31 1999 Annual Due for 1st year Due by March 1, 2000 Or as two payments Due by March 1, 2000 and September 1, 2000 Checks should be made out to Southern Arizona Water Users Association Mailed to P.O. Box 36870,Tucson, Arizona 85740