HomeMy WebLinkAboutPackets - Council Packets (1590) AGENDA
SPECIAL SESSION
ORO VALLEY TOWN COUNCIL
AND
BOARD OF DIRECTORS FOR ORO VALLEY
WATER IMPROVEMENT DISTRICT NO. 1
JANUARY 28, 1998
ORO VALLEY TOWN COUNCIL CHAMBERS
ADMINISTRATION CONFERENCE ROOM (EXECUTIVE SESSION)
11,000 N. LA CANADA DRIVE
SPECIAL SESSION - AT OR AFTER 5:30 p.m.
CALL TO ORDER
ROLL CALL
EXECUTIVE SESSION - AT OR AFTER 5:30 p.m.
Pursuant to ARS 38-431.03 (A)(4) to obtain legal advice relating to litigation of MDWID/OV#1
v.s. City of Tucson (Amended and Restated Settlement Agreement & Amendment No. 1 to
Amended and Restated Settlement Agreement)
RESUME REGULAR SESSION AT OR AFTER 5:30 p.m.
1. RESOLUTION NO. (R)98-OS APPROVAL OF AMENDED AND RESTATED
SETTLEMENT AGREEMENT AND AMENDMENT NO. 1 TO AMENDED AND
RESTATED SETTLEMENT AGREEMENT BETWEEN MDWID, ORO VALLEY
WATER IMPROVEMENT DISTRICT NO. 1 AND THE CITY OF TUCSON
(CONSIDERATION AND/OR POSSIBLE ACTION)
ADJOURNMENT
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.
POSTED: 1/27/98
4:30 P.M.
RG
i
TOWN OF ORO VALLEY
COUNCIL COMMiT1vICATION MEETING DATE: 10/22/97
TO: HONORABLE MAYOR AND COUNCIL
FROM: Tobin Sidles, Town Attorney
SUBJECT: Resolution number(R) 98-()S" Amended and Restated Settlement Agreement,
First Amendment to the Amended and Restated Settlement Agreement
SUMMARY: Some more details have been worked out regarding the settlement agreement
for this lawsuit. The amended and restated settlement agreement is the document recently
approved by the City of Tucson ,MDWID, and the Pima County Board of Supervisors. Oro
Valley is being asked to approve that document tonight. Oro Valley has a few changes that
we would also like to see added to this settlement agreement which are listed as the First
Amendment to the Amended and Restated document. These amount to language changes
and more specific figures, but do not affect the basic terms or amount of the original
settlement.
ATTACHMENTS:
1) Amended and Restated Settlement agreement.
2) First Amendment to the Amended and Restated Settlement Agreement
3) Resolution number (R) 98- C�5
FISCAL IMPACT:
No change from the original agreement
RECOMMENDATIONS:
Acceptance is recommended based on the adoption of language approved by Oro Valley and
the other agencies specifying and dealing with the points raised in the First Amendment
to the Amended and Restated Settlement Agreement.
SUGGESTED MOTION:
I move that we approve Resolution number(R) 98-45 , which is the Amended and Restated
Settlement Agreement, such approval being contingent upon the approval by both Oro
Valley and the other involved agencies of a First Amendment to the Amended and Restated
Settlement Agreement,which will designate in writing the following points listed below and
in the First Amendment document. The Town Manager shall be given the authority to
approve the following changes on behalf of the Town.
1) Oro Valley's share of the CAP water allocation shall be 642 Acre feet
2) Oro Valley's ratio for water rights calculations and proportional interests shall be 6.758%.
3) Language changes regarding prepayment and partial prepayment shall be specified.
4) Any other changes as listed in attachment # 2 to this communication shall be adopted.
or
I move that we deny the approval of the amended and restated settlement agreement.
. d),/---------4----7--1 ---40.:_f‘
IQSignature of Department Head
_d---
To Man 's Review
AMq1h) aa kte5_)na .�71/-le04e#4-/- Ilyreemeol---
. r,
SLACXLINE MARKED TO SHOW CHANGES
FROM SIGNED SETTLEMENT AGREEMENT
_:.;,,.= ,A„,,,, SETTLEMENT AGREEMENT
This • =_�= : ? 4 : � '` � Settlement Agreement (the
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!Agreement is en eiea into .nis ��e eeth _ ; __9
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• ,.,,;: ; , ti �:::. ::..f....:..:.Y.'...: � Cityo f Tucson (the
r.�.:: :..`. .�.: �......,>.�..}..:.�:: byand between the
City ana a Ike opolita
n Domestic Water Improvement District
("MDWID") and the Town of Oro Valley on behalf of the landowners
within its Domestic Water Improvement District No. 1 ("Oro
Valley") . MDWID and Oro Valle are referred to collectively as
the "Districts" _ >., ;•••;1',;1*.f5 .,.':::attititast—stii:AgiiatiOtt#11140-ttire
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I. RECITALS.
A. The Cityis the Subcontractor in an agreement (the
+� amongthe City, the
"Subcontract") dated November 28, 1988 Y
Central Arizona Water Conservation District ("CAWCD") and •the
'ted States ("U.S. ") he duration of the Subcontract is fifty
Uni � ( � �
years commencingin 1993 ; under the terms of the Subcontract the
• upto 148 420 acre feet
City is entitled to receive from CAWCD ,
per year of Colorado River water through the Central Arizona
Project ("CAP") .
P
B.
On or about September 21, 1992 , the City and the
Districts entered into an Asset Purchase Agreement (the "APA") .
Article V expressly provided the APA a ressl that the Districts would
g
assume
the obligations of Metropolitan Water Company ("MWC")
under the Agreement for Water Service entered into between the
gr �� At the closing
Cityand MWC on May 29, 1979 ("1979 Agreement") . •
October 1, 1992, MWC assigned to the Districts all
of the APA on
of its right, title and interest in and to the 1979 Agreement,
agreed the
Districts a eed to assume and be bound by all of the
terms and obligations of the 1979 Agreement.
C. The terms of Article V of the APArequire the
Districtspurchase to treated CAP water from the City beginning
to paythe Cityfor the water whether or not
July 1, 1995 and
they take delivery of the water. The Districts agreed to take
CAP water for as long as the
or pay for treated City has a CAP
allocation. The Districts assumed MWC's obligation to pay a pro-rata share of the City's cost of importing water into the
Tucson area and to pay certain operation, maintenance and repair
expenses to the City.
f '
D. On August 16, 1995, the Districtsfiled Cause No.
308139 in the Pima County Superior Court of Arizona against the
City. The Complaint sought a declaratory judgment that the
Districts were excused from their obligations ations under Article V of
the APA for, among others, the reasons that the treated CAP
water produced bythe Cit allegedly failed to meet contractual
Y failed to complete
water quality standards and that the City had P
construction of the Northwest Supply System as allegedly
contemplated bythe APA. Subsequently the City answered and
P counterclaimed, denying that the Districts were excused from
their obligations and seeking the following relief in the
alternative for alleged fraud and breach of contract:
rescission, specificperformance, damages and declaratory
secP
judgment. On December 1, 1995, the City filed its Disclosure
Statement in which it . detailed damages by reason of the
Districts' alleged fraud and breach of contract in an amount in
excess $29, 000, 000 based on the present value of the loss of
of $29 000
an income stream for thirty years. On July 10, 1997, the City
revised its damage claim to $26, 660,526. The complaint,
counterclaim, other pleadings filed,
g and the Court's orders entered in Cause No. 308139 are collectively referred to herein
as the "Lawsuit. "
E. The City and
the Districts each believe that their 7
respective allegations in their pleadings filed in the Lawsuit
are correct. To avoid further litigation, however, the City and
the Districtswilling are to enter into the covenants and
agreements stated below as a full and final compromise and
settlement of all
claims asserted in the Lawsuit, or that could
have been asserted in the Lawsuit with regard to the APA or the
1979 Agreement between the City and MWC.
NOW, THEREFORE,
in consideration of the mutual covenants
and agreements herein
set forth and for other good and valuable
consideration,
onsideration, the receipt and s..�uf
f•...iJ:ch1r•rVXi:1✓'e:1/iNnM1cAiY I►:\•:Y�of•Yfw1.VYh1Nif.YIc.N`hAti1%%V1I:•a:•:':.rti•. e•Y•h•tY%:e%:r.•:•:•re:•:•:b:.
y
acknowled ed the partiesOffitiii****00#0*.:.:?:#044***
4#0000t as follows: ►
II. AGREEMENT.
1. Order: Judament.
The parties agree to execute •the
1.1 Order,. , as Exhibit
Stipulation for Entry of Order in the form attached
"AP herein bythis reference, after the
hereto and incorporated Agreement.
Pima CountyBoard of Supervisors has approved this
• that the court enter an order in
Such stipulation shall request A.
the form attached hereto as Attachment "1" to Exhibit
1.2 Judgment. parties arties stipulate and agree that
Subsection 4.1
enter judgmentuPon satisfaction of the conditions subsequent in Subsecin the Lawsuit (the
below, the Court may
"Judgment") in the form attached hereto as
Exhibit "B";
� may however, that the Judgment only be recorded as a
•
M3C1175274.2/TU01a-OO.SOQ
January 6,199*
lien, executed upon or otherwise enforced in the event of a
District Default, as defined herein, by the Districts, or either
of them. The Judgment shall be entered and paid as provided
herein, in settlement of certain tort claims asserted or capable
of assertion in the litigation. The Judgment shall incorporate
the provisions of Sections 2, 3 , 5, 6, 8, 9, 10, 13, 14, 15 and
24 of this Agreement and shall provide that the Court shall
retain jurisdiction to enforce the provisions of the
incorporated sections, including, without limitation, the
jurisdiction to enforce the rate setting provisions of Section
14 through mandatory injunction, mandamus or otherwise. The
Districts and the City agree that they shall never contest the
legality or enforceability of the provisions of this Agreement.
The parties agree to cooperate in seeking the entry of the
Judgment by the Court.
2. payment Qbligatior. The Districts agree to pay to the
City the principal sum of $12,297,464 as follows:
a. The sum of $800, 000 (the "Initial City Payment")
on or before the 30th day after the date on which the Order is
entered.
b. The principal balance of $11,497,464, which shall
bear interest at 5.3% per annum, paid in 42 installments (the
"City Installment Payment" or "City Installment Payments") as
follows:
(1) The sum of $375,000 on each of the first 30
City Installment Payments, and
(2) The sum of $820, 000 on each of the remaining
12 City Installment Payments.
c. The first City Installment Payment shall be due
on the first day of the sixth month, succeeding the month in
which the Order is entered. The second City Installment Payment
and each subsequent City Installment Payment shall be due on the
first day of each subsequent 6th month. The last City
Installment Payment shall be due on the first day of the 252nd
month. Exhibit "C" attached hereto and incorporated herein
provides the numbered month when each of the City Installment
Payments is due and the amount of the City Installment Payment.
For purposes of Exhibit C the first full month after the month
in which the Order is entered shall be Month #1.
3. Assignment of CAP Entitlement,. Upon entry of the
Order, the City shall assign 9,500 acre feet of the City's
entitlement to CAP water under the Subcontract (the "CAP
Assignment") to First Trust of Arizona (the "Trustee") , or such
substitute trustee as the parties may later mutually select, to
hold the entitlement for the benefit of the Districts as First
Beneficiaries and for the City as Second Beneficiary. Attached
hereto as Exhibit "D" is a copy of the CAP Assignment in the
MSCl175274.2/TU014-00506
Jaaua:y 6,1995
3
form to be executed by the City, the Districts and the Trustee.
Until the Judgment has been entered, the City shall provide to
the Districts full access to and use of up to 9, 500 acre feet of
CAP water, so long as (i) the Districts are not in District
Default as defined in Subsection 8 .2 below, and (ii) the
Districts timely make the payments to CAWCD for the Operations,
Maintenance & Replacement ("OM&R") charges on the CAP water
ordered by the City for the Districts. After the Judgment has
r. t:}•w• - C;. .v:Y,�.;:.� .•C'}Cti. �{dThi1
•hyk!L►' 'r]K'' :!j`:S!�?:!ti�ti •.•.:rt,:ti•:::•'tti•:::::.;::�::::.titi�::.•r.;.};•::.;�:;.vr
?'�?'..�k r .. •!. 0000•:
�3e�33 �3°it�_Cts �" C� :�c� ';�a� �.�; .;..,".�•: :::. .............:s:::
•�'• •.v. :r ':v:: '•{ir: ••.}}};:f•iiri:: :::}:{:: ':
-.v�. .n:�w'�• •.}: :rµ}•x.�{r.}}rr}v��•: �':Ji?PUi►::v:::;.;.�y�<k.•: �t�tii• .:: : 4�pq'p'r'Q'{i:' :.... :.:h
•�� ;f. shall haveFull access toand
:,,, 4thbistricts
CAP entitlement l �• � and enjoy a
use of to ,5 O0 acre feet of cmcnt 0
status equivalent to other M&I CAP Subcontractars except as
' •• •�xy�V•'r.A'AM'I.�M1•.'•::::••.:'.':::S•Y fi{•,1.h':..'r r.\Y. •.\:�v�YY:.�YrrM•:::::��:.::-::: •• •A••L`YJ.M1V�
Pprovided in the CAP Asst ent ' . .. 0 00 0. .. :.::.: :.................• .
� '•':w•r.•:tiKi►i�titv5►ti•:ti•'�—the '• :•rii:. .:<v'��tvi•;•. .v..,iti•.ti•.�:::.::::::::.•;: :�:.tip
and the Trust Agreement, so long as• th. is ric is are not in
District Default.
4. Conditions Subsequent.
4.1 Approvals of CAP Assignment. The CAP Assignment
will only become effective after (i) it has been approved by
CAWCD and the U.S. , following comment from the Arizona
Department of Water Resources, and (ii) a new subcontract (the
"MDWID/Oro Valley Subcontract") between the Trustee, the
Beneficiaries,iciaries' CAWCD and the U.S. has been entered into and
'� (collectively,validated by a court of competent jurisdiction
"the Approvals") . The Approvals shall be deemed to be completed upon the date on which the MDWID/Oro Valley Subcontract is
validated bya court of competent jurisdiction ("Judicial
• agree to cooperate
Validation") . The City and the Districts gr P
with each other in seeking the Approvals. This Agreement shall
become null and void and the Order shall be vacated in the event
that the Approvals have not been completed on or before either
PP
(i) the five hundred sixty first (561st) day after the entry of
the Order, (ii)or such other day as may hereafter beestablished by written agreement of the parties. The Approval.
Period shall be the first 560 days after the entry of Order plus
either 60 days or the date of the• entry of Judgment, whichever
y 'tten agreement,earlier. The parties may, by wrl extend
the Approval Period.
4.2 Enter of Judgment. In the event that the
is � e the � Aoo i�nmcnt
Judgment not entered within 60 days aft r
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•.Yr YtiV�.•• -♦th •�.Y•�Y��•Yy:� ,y�1aY'.'}••• h• rr: •tti �N
•�\fir/ w������� ������� . i }:•'• 0000
'ti}}�'•;;;;,;;,C;;Z;;;,;;,C:��,;,�j',;;OG;n1�10;,;�v�rr,;r�iijiC;;,:•ivr::;i►.::.aYriia+�•r•:.::;r�,i�•:.birv:�:..:::.}:�•:
..:............:....... :
Agreement shall become nu and vol , ess a parties by
written agreement extend the 60 day period.
4.3 Failure to Satisfy Conditions Subsequent,. In the
event that this Agreement becomes null and void because of
failure to satisfy a condition subsequent:
a. The Order shall be vacated;
b. Neither this Agreement nor the Order shall
be admissible for any purpose in the Lawsuit;
•
M93C1175274.2rrU010.00506
January 6, 199*
4
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c. - - . - - - - gtifetzt
d. The Invested Funds, as defined in Subsection
6 (a) below, and the accrued interest thereon will be returned to
the Districts; provided, however, that in the event that the
Districts order CAP water during the Approval Period in
accordance with the provisions of Subsection 6 (c) , the Trustee
shall withhold an amount from the Invested Funds equal to the
annual capital charge in effect at the time of the order
multiplied by the volume of water ordered, and any interest
accrued thereon, and disburse this amount to the City.
5. Assumption of Subcontract Obligations,. The Districts
agree to assume the obligations of the City under the
Subcontract with regard to the CAP Assignment and to make all
payments required by the Subcontract relating thereto (the
"CAWCD Payments") . The Districts shall timely make all the
CAWCD Payments to the Trustee in order that the Trustee may
timely forward the CAWCD Payments to CAWCD. During the Approval
Period, the Districts shall pay to the Trustee the payments
required by the Subcontract for the capital charges for the CAP
Assignment prorated from the date of the entry of the Order.
During the Approval Period, the City shall make the payments to
CAWCD required by the Subcontract; provided, however, that if
the Districts order CAP water during the Approval Period in
accordance with the provisions of Section 3 , the Districts shall
timely make the payments to CAWCD for the OM&R charges on the
water ordered. The parties hereto agree to use their best
efforts to obtain the consent of CAWCD to invoice the Trustee
for the Districts' CAP obligation.
6. Instructions to the Trustee. The Trustee shall hold
, .... .�'•:;:{.•••.�v L}rw�►.v.}ti:•:•:ravyrr.}ir:./.� < all
�: : .::.::: •':� :�:f.• .;::•. and
Ass 1 ent. �: _w / : - :::;�.�.. �.
the CAP gnia .f:.=' `.` 3.. . �.:::::. "
..�-,, '�°`°°°�':.Y.. .� �...�:. ins���ructions the
payments in accordance with e foowing
Wiergi*.7.10W4 Exhibit ��E��, and
intructionsattached heretoas
such SuPp lemm ' "anstiuctons as the parties may subsequently
and jointly execute:
a. The Trustee shall hold the Initial City Payment,
the City Installment Payments and the payments made bgthe
Districts for capital charges for the CAP a igcnt : ..;::'
provided for in Section 5 until such time as the gm
been entered or the Approval Period has expired, whichever first
�p Funds"). These funds (the "Invested Funds ) shall be invested by
the Trustee as instructed by the City, but such investment shall
be limited to United States Government securities of a term of
no more than one year. At such time as the AoOignmcnt is
-.�..'.tiYI ,,�.., .�,. .:,,,�,�c, ,f,.�,�,�,�„.,�•.,,v,,..;,;,,•,:,.. shall disburse
effective = � : :a :: the Trustee
.. -:;iiri►••'���.T.•::w:••'•r:��r�� fOge.€11-eFiiiti:v► Erfh' Ecrued . •the Invested3 rainterest, to the City.
MSCI175274.2/rUO10-C 06
January 6, 1991
5
If the Approval Period expires, the Trustee shall disburse the
Invested Funds, together with accrued interest, after the
adjustment to Invested Funds provided for in Subsection 4 . 3:C d_) ,
if to t.'ze Districts. If the Approval Period expires �•
any.►::.:i.::f:.�.:. ..}.. �.. :,'.�.:::::.� � ---
:��� shall �ctu�n
:. : the Trustee
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t�••. !���: '.���•�+.�•,�� :•.:. � •NNS\K:::•.N:•.W.!:::... .Y.\.
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t•ari
1$4.0.tagg010:1*OCI#1.rilii.gitt:747af:43,35:4413.44004#
$out.
e �(.
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j��� t: +;!��� i#u'tiigioiei't�
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+���I�I�I iii v::::� •.v:::•• ...::v:�•'•.
•:v' 4*ia— vattvz 'sz -
airliiiaiaarnrertiviiiirtaNse
ry•i:•. .:. :T!•.\A�:rti. �Y?P?O: t::•:dctfrm the Invested F p
Subsection 4.3 (d) , and terminate the trust.
b. The Trustee is to ' receive all "City Payments"
of the Initial City Payment and the(consisting City Installment
Payments) from the Districts made pursuant to this Agreement for
the benefit of the City and all CAWCD Payments from the
pursuant to the terms of the `:• � 17.0
Districts ��. �� ' :�...:r.. .
•:: tiV►'Atit:•:•II�•M '•v'' •' •'•
U on receipt of• a
Subcontract for the benefit of P
payment, the Trustee shall record the data of receipt and that
record shall conclusively establish the date of receipt. .After
the Judgment has been entered, the Trustee shall within ten days
of the receipt of a payment from the Districts disburse the
money to the entity for whose benefit the payment was made. On
or before the 10th day after a payment is due, the Trustee shall 7
provide written notice to the Districts or either of them if payment has not been received by the Trustee.
c. P
Upon payment in full to the City of the amounts
P
'
required under Section 2 above, the Trustee shall assign and
t*wiroggigutwoutliwotiooA'wY.Yh Y•.Y'.A1•.ti'h•:.••::: I oo
= - -
Egattgopifrwonvyqw.nmgiu ::!:goboofr*og--t`o
e
'�}:��5►vvtti: •:iiv• • �iir:::ti�::•:•}:}•}�;y}}\i�. �i....•.•::}•.i�?�:tivieletffaZEerSetween�:ti•M+•Av.•�•:�wv ::vJ :' •r.:•: v.+}::: `:: :: :: ucfi asst iat iZI theDisticts, wis g Districts in accordance with the "Capacity Entitlement" of each,
as defined in Section 1.1 of the Intergovernmental Agreement
dated September 28, 1992 between MDWID and Oro Valley (the
P 'offices of the Pima County
"IGA") . The IGA was recorded in the off 1
Recorder on October 1, 1992 at Docket 9388, Pages 497-537.
Section 1.1 of the IGA is attached hereto as Exhibit "F" and by
this reference incorporated herein.
d. In the event of a District Default, upon written
to the Trustee from the City, the Trustee shall
notice ::Y,��.....••:.}Y ::.::.:..:.::.: :r
• i A 3 o i nmc nt � � `��ii
immediate) assign and delver the cAr ..�..�..,.::.�:....:. :z
'.Y.Y:.•.1•.:\:�N •.W.Y.\Y. .
immediately,
!.\•.VJ.:•.\. .1:'.�..�.�•��. .r:'��^•
illa
.. ��{ :•.vwi++i►irtitiii:4:•:titiw:•iivYJ`.3 ►vuiJD}wtiiwJiwv�v{wSiti �Ytiwwv3�ti�tiwwtititiYvC:ti'':.:titiv:•:•:•'v:• •:.w.v+nv:tiY.•.v.:tiwtM•.v.r::.ti ..
the `•City.
7. -- &le: • - -tee's Fees and L!.•ens es.
7.1 The City and the Districts agree to an
apportionment of the Trustee's fees and expenses, for so long as
MDWID and Oro Valley operate under the IGA, as follows:
City a.
The shall pay 50% of the fees and
expenses, and
MSC1175274.21T1J010-00506
January 6,1998
6
P •
b. MDWID shall pay 50% of the fees and
expenses.
T.2 In the event of termination of the IGA, MDWID and
Oro Valley shall pay their respective shares of the fees and
expenses pursuant to Section 9 below.
8. Default.
8. 1 In the event of a default by the Districts, or
either of them ("District Default") , except as herein
specifically provided in Section 14, the City shall be free of
any restrictions whatsoever against executing upon or in any
other way enforcing in any lawful manner whatsoever the Judgment
to the full extent of the Judgment, less only such amounts as
shall have been paid to the City pursuant to this Agreement. In
the event of a District Default, the Districts shall have no
right of reinstatement.
8 .2 A District Default is defined to be any of the
following:
a. Failure of the Districts to make any City
Installment Payment specified in Section 2 above on or before
� P City 18 0th day after the date on which the Installment
Payment is due, provided that there has been no previous
yia
delinquency of a City Installment Payment of greater than 60
days ("Previous Delinquency��) , but if Ythere has been a Previous
Delinquency then a District Default shall occur on the 60th day
� Y
after the date on which the City Installment Payment is due
unless the parties agree in writing otherwise;
b. Failure of the Districts to make any CAWCD
Payment pursuant to the terms of the Subcontract on or before
Ym
the 180th dayafter the date on which CAWCD Payment is due,
• consented and that there
provided that CAWCD has affirmatively
has been norevious delinquency of a CAWCD Payment of greater
p Delinquency") ;6 0 days ("Previous Delinquency ) , but if there has been a
Previous Delinquency then a District Default shall occur on the
� Y
60th day after the date on which CAWCD Payment is due unless the
parties agree in writing otherwise;
c. Anyrequest by or on behalf of the
� Trustee, prior to the
Districts, or either of them, to the _ •
or tranferheCcction 2 above40#11:1010Wiral, to assign ..}}Y..>Y. \,r....: };,....}},•..:.:..�}::.,.�:f.}}»_ ti•:.e
,: 1t . :::: �.}::::: ' .':.."••-'Ems:�. :: s
o eTEher ci is ....f _ 0 0000Distrir .r.
•M
•�.YW V V
V �•L o. :t:::•••:::.�:::• 0;;0:00 ..: .::.
i •o��o'ooQoa •: •:'.•o :.•: \Y:•:tA\YJMh•}:•g o J:ti'.:• ..:::.
#0.400)440#0441711fA�Cvt•: •0.0.0.0•.:.1. .ti:ti'•:v::::::::::v'.'':'.NEIN-:J:;.�:.��.�:ti•: .\ti:' •'\':. �S
•0.000 f: �•«:• '•: On
om
>. Y
:: : riEZI'air'elwiEitleiiielirliercrtrile Trustee The
• •
e
administrative action to co ?el the Trstef�
filing o f a legal or „,•,,.,,,,,,,.Y. ,r, ..f.�. ,.,.• •:::•:
.000
asst n or
transfer r:
.74
to :40 *. ***0*-0.0!4* **M
9
* *4%i
#f.
Y
••ti
'\\Y1A\\•. :I.YV►VVWIAM•• �Y::•::•:•:� •'`•;':•;:•':'* 0111.*#4♦Y, Jof• tie d � Assi nment ... :::tiYf:,4 g ::,.:.
MSC/175274.2=010-011506
Jiauary 6, 1995
7
�` ;�;M,�,:•fII shallrequest purposes of this
be considered a r qu for pure
:•x•::;x<:•<' �'•�•' bytheto divide the 9, 500
•Subsection. Formal action Districts
acre feet of CAP water evidenced by the a Agreement in
accordance with - _- - - - - - - - - _ -
thc 'o•.
:the
.e
ICA
a •• '� •'�'.,••`�• ••
4i#E#4:00.4e#
!:ii.**Uliii.004#0*Cif0.aaili.::.**W:!it***:iiNVOI4
;'r::S:r:•'r'* '••Y'• '•ai►::.•,:...• ''::ti{{•ti•:•:::t:.,.•..:•:
ti�•* � spial not ie c eeme a default hereuni er so long as
neither -District seeks the transfer :..•: :....••:::.•'•::.••:.:::......
7.0.*.aiigt1::iii:: .101:
N 'J:
�}�� A :nth•
.r:
M .SMI
•:\Y 'IJVV
....::5•:.:t.•:Y.%IM:t ::VIYi1Ar11•I.•1':'f:•: 'Y
s or ----_ J nasi nmentof• any porton •o•r tie C P
:tiff•.{•: •:kvi:{: .:•?'.:vr:V:w: :+� •:wi�DOiwii
assignment.
d. To the extent permitted by law, the filing,
by either of the Districts, in any court pursuant to any statute
either of the United States or of the State of Arizona, of a
petition in bankruptcy or insolvency or for reorganization or
for the appointment of a receiver or trustee of all or a
substantial portion of either District's assets, or if any of
the following occurs:
(1) a receiver or trustee takes possession
of any of the assets of either District; or
(2) Either District makes an assignment for
the benefit of creditors or petitions for or enters into an
arrangement with creditors or takes advantage of any insolvency
law; or
(3) if an order, judgment or decree shall
be entered byanycourt of competent jurisdiction on application
of a creditor adjudicating the Districts, or either of them, as
bankrupt or insolvent or approving a petition seeking
P
reorganization of the Districts, or either of them, or
appointing intin a receiver or trustee of the Districts, or either of
PP g
them, or of all or a substantial part of the assets ofthe
Districts or either or them, and such order shall continue
unstayed and in effect for any period which exceeds 30 days.
e. The assignment by the Districts, or either
�• he beneficial
ofany *tatigftUFVa:XWP:i7S*Caaa.Wgk::*gi-r:D:##gis or obli ations or of t
them, �3 .� ,�,,,::�:.. .:.:::..:....::...:..
o f rights �.�,.�\..;: ..: �.�::•..r,.�::�\�.�• ..•-�. CAP
• • Y:.� ,interest in the : ::;:. :: : =:.
Assignment ent in violation or n
Sectio3 otis Agreement.
8 .3 In the event that one of the Districts takes an
action described in Subsections 8 .2 (c) , (d) , or (e) hereof, the
remainingparties to this Agreement shall have the same rights
• • other, pursuant to Section
and obligations with respect to each
9 of Agreement,this A eement as though the IGA had been terminated or
not renewed.
8.4 The City has no right
't o f the �!� �: :. r�.
transfer by the Trustee to the C i .y ,ojubàôutrat+ _` :\ v/.NI•• �.1. o�
• '��•:.. t . :V. M•.1..•...til\:VY•ti•: •.Y..
�� � �•lon theredf• •excep
•� � ::::• Ass 1 nment or any port
:•l':V 1N}V 1:Y:\h1v}•}}}:.i'ii/IIJ"Mti:WYI:{•}M:Y.Y}f{1}:ffliIf}}}�
MSC 175274.2M1010-00506
January 6, 1998
8
upon a District Default. In the event that the City makes a
re est to the Trustee to assign or transfer any portion of the
2#40. :ti: •:•:AAAI:•
•:V J�hIMti':
1.4.0*4.0.***•!$.0004#.4fai*Ra#:$:.!ii)*:00w..ZZO:02:V..4114
'•I
:SLY
r
••e
n
•�s
s ilm
ent
�o
:h
.....,_f"r::::::tw{v::i •:'r.:�}::.r�iikr,w:/:n:;.;A,. {•wr:•...:i.•:v:.v\\• ..•:�r:�•::''•.•.:::;.;;;;,ti•:: g a
tie absence o a �llstrict Default, or files a le or
administrative action to compel the Trustee to assign or
• .�w. •.ti,..\,., v;�vw{.y.}v.;x•.}vti�ti^iw�\ .::{. .•::: .'•'•:!Ywvv tib•.}•.�-.�
o the •4.447 : •:•: ::'v. satit :
transfer an onion f •.
X
!: r:
rr: ` t�.
'.AY::Y:\'�1':': ':tiff:•::ti,;•:•::.,,,;A. ;,;,;,\'•''\,Y.♦,^:.::•''''''�Y:w\N:::••••��%�:::ti:•.':•i►K•�Vrv�Y/K• �`:KM{VN•:•':ttiti•:•:ti:••:Y%:'.•:�titi/1.M of a �•1r� the
Asst nmen o he C1 in the aBsence cz I eta at
Trustee shall **7.7,0144#7.04 transfer to the Districts,•V.:Y.M::ti•::.L\\Y.:•'.Y�•• .t:.W:.•.•.Y�'.Yti1\}\'on
•has`:•:c ntra to•��� �• ta*t:4Wf:0145:iifair.i.V.r:W:A',i*§*4#04.:........................:�.':'......:::.:. ................. .AM1' 'Y1/.Y:•:tiV►ti":ti1N\1titiMVVY:titilAlfi:•:•t:.Y.1•:Ih"I•:"IYV IrY►'N►'iV1AAJ►
'ti li: Y• }
9. erm' at'on o MDWID 0 o Va e I ter.overnmenta
Agreement.
9.1 . The IGA provides for the unified operation of the
"Water s
S tem" as defined and described in the APA, upon the
Y
Districts' acquisition thereof pursuant to the APA. The IGA
provides for an initial term of 20 years, renewable for further
terms of 5 years each, and for termination of the IGA at any
timeP ursuant to Paragraph 17 of the IGA. Section 17. 6 of the
IGA provides that upon termination of the IGA, the rights and
• to water rights shall be
obligations of the Districts in and g
calculated according to the "Capacity Entitlement" of each, as
defined in Section 1.1 of the IGA.
If at anytime during the Approval Period or
9.Z
after the Judgment has been entered, the IGA is terminated or
the term of the IGA is not renewed, the rights and obligations
of the Districts under this Agreement shall be as follows:
a. MDWID shall be responsible for the payment
of thatercenta a of all payments due after termination or
P g
nonrenewal of the IGA, pursuant to Subsection 2 (b) and Section
5 of this Agreement, that equals the total payments due
multiplied bythatpercentage equal .to its Capacity Entitlement,
P '
as defined by the IGA. In the event of a District Default by
MDWID thereafter, as defined in Section 8 of this Agreement, the
City shall, except as specifically provided in Section 14, be
free of anyrestrictions whatsoever against executing upon or in
enforcing
any
other wayin any lawful manner whatsoever the
Judgment to the extent of the obligation of MDWID multiplied by
that pg
percentage equal to its Capacity Entitlement, less only
such amounts as shall have been previously paid to the City
pursuant to this Agreement. In the event of a District Default
by MDWID,WID upon written notice to the Trustee from the City, theTrustee shall
immediately.,
ass ign� b ' to' t
C 3t
.
'
0
Weird#14-
Yw►ftan0ir tiXti ?}}Si4gXr�} a9{ n 4CP ^ : 2 :
Ititgargiilii,/_4.1rSam• ditAs � N } • }.0
4
tfegftfi.*tgf.*f*Ut.Wf*gWiraaffittitggi*AjiOhig:Wtgt:O.**:WtW
tiftgiii
:e:.:q}:•:•:u•.V::Va.tiYl' 'to W •!r. 0w •4 al:•�. '•}.•JAI.
r
• k
Ati
'
#fiatififfrih'ati!!*iiiiliMitil***5iff*rififfil5Trger ercenta
rapacty ' ntItlement- In addition, upon ne
•MSC1175274.2JTTJ010.00506
January 6,1995
9
termination or nonrenewal of the IGA, MDWID shall be responsible
for paying that portion of the Trustees' Fees and Expenses equal
to 50% multiplied by that the percentage equal to MDWID's
til::ti'f:HC
Capacity Entitlement.
b. Oro Valley shall be responsible for the
payment of that percentage of all payments due after termination
or nonrenewal of the IGA, pursuant to Subsection 2 (b) and
Section 5 of this Agreement, that equals the total payments
multiplied by that percentage equal to its Capacity Entitlement,
as defined by the IGA. In the event of a District Default by
Oro Valleythereafter, as defined in Paragraph 8 of this
Agreement, the City shall, except as specifically provided in
Section 14 , be free of any restrictions whatsoever against
executing upon or in any other way enforcing in any lawful
manner whatsoever the Judgment to the extent of the obligation
of Oro Valleymultiplied by that percentage equal to its
P
CapacityEntitlement, less only such amounts as shall have been
this Agreement. In the
previously paid to the City pursuant to g
event of a District Default by Oro Valley, upon written notice
to the Trustee from the City, the Trustee shall immediately
I t 4 i f�:
asst n -- �. _ .. '. ............ .. ..
99...Ag .
.W. !�'
�Z•;� NM
ow ':'MF
:414.4.**viiiii
Y :.f : .40:1400:**iii#004.****ziliiiithoggt*WW:pigo01000.:*044
. e � tiaz ercentage equa `to Oro
Valmr�y t s•'h��"�apaci�y�•��ntitlelaent. In addition, upon termination or
e
nonrenewal of the IGA, Oro Valley shall be responsible for
that portion the Trustees' Fees and Expenses equal to
paying of tOW e al to Oro Valley's
50% multiplied by thatpercentageequal
Capacity Entitlement. r:`• xr.
c. MDWID shall have full access to and uac of
- - - - - - - - - - ' _ L :YJ- - �.t :::: ..:'';:;::: i:i i : ►1
r. •
.•r: _
•moi►r►}'..
s
n
i
n
.ri.
.n
a
s
•o
s
0
1
4
+: :;: .!. r:..:•.•.�:.,..Va i�ey..:,;,,.•..,�::ti•.� have full access t o and time
t of aul�tw """Oro shall
D�istrc . _
_ - •► - - .. -• - - • - :: - :•:tib: ;o f:�.:::::.Qi3 ••'1Li►
•M•. W
gottgo*iiiiiT4:ggi-iiiv*.iiiikol.p.to#1;:iiiim*.xxot.liliiiiigo.#0#4:#1f;
YM.
.W•.1
l r
,.e•
h.
•e ijR••tr:•:. ...
.•O• o
'go-Tong o
a
r
valley not 1i1• -mart c lDer aul•t:
."-
d. Upon payment in full to the City of the
P P �
amounts required of MDWID under Section 2 as modified in
part bySubsection 9.2 (a) above, the Trustee shall
relevant • _
assign to MDWID - _ - - _ -.:: - - _ _1A��Ty'y��'.,...
#oittoiv:EoggttwgitatAopgow:totifk.00irriogesoo.§.ttx*:4#0#EmtAtiIV��s\
mpservotttilvAin:dpmittittotitt4dt
--
.::'::.::1Y::•:••.•:1AYtMSWf:'►Y:•I:•fr:::1t•Y:tih1PMtiV•:`:l:..:.Y:•.Y.1•.Y•WJ::LNhN4.Y:Jlih{1M�VMIIM/1N1/A1{YN%1
MSC1175274.2I TV010-00506
Januar/6, 1998
10
e. Upon the payment in full to the City of the
amounts required of Oro Valley under Section 2 as modified in
relevant part by Subsection 9.2 (b) above, the Trustee shall
assign to Oro Valley - = = - - - _ - - - - ' - =
•
\\\fit !ti\...\.�.. ..• ••\ :N\NK•: :1. .:•.\•.
ok
NY
1►M/NK
:titi;••A:I
•titK
tt�� ::vC�r:L::•.\ti•.�iiriv::7\�Y:K•:titi<::S:v::w•:iw►�iC�wCiV►NSwvltiiirii5i�i��Aiii'ri
iv0i•}?iMrC•
-o:•iii{ver+isiiv'r'v}rvvieviiriiJOC+:ti+viitiwiCtiviii+iva
10. DelincxuencyjDefault Interest. In the event that any
payment specified in Section 2 above is made more than 10 days
after the Payment Date on which it is due, the period between
the 10 days after the Payment Date and the date on which that
payment is made will be a delinquency period (a "Delinquency
Pa Y �� rate on the
Period") .. The applicable interest unpaid principal
during anyDelinquency Period shall be the Delinquency Interest
Rate as defined below. The Delinquency Interest Rate shall be
10% per annum or 1.5% above the Prime Rate, whichever is the
• Prime Rate quoted in the
higher. The Prime Rate shall be the
Wall Street Journal, or comparable publication, on the first
publication dayafter the commencement of the Delinquency
1
Period. Upon District Default, the Delinquency Interest Rate on
the unpaid principal balance shall apply on all outstanding
P P P
balances until the Judgment is paid in full.
11anese tatons
' Warranties and Covenants by the
Districts. Each District, severally, makes the following
representations and warranties to and covenants with the City.
Each of the representations, warranties and covenants shall be
continuing
and shall survive the execution and delivery of this
9r
A eement. No breach of any of the following representations,
warranties or covenants by one District shall affect the
liabilities of the other District to the City.
Standing a. Organization, q and Power. The District
is duly organized and validly existing.
b. Authorization; Enforceability. The District has
fullpowerauthority
and to execute and deliver this Agreement
and to consummate the transactions contemplated herein. The
District's execution and delivery of this Agreement and all
elated a eements documents, and instruments and the
consummation by the
r � � District of the transactions contemplated
herein
on behalf of the District have been duly and validly
authorized necessary byallaction on the part of the District.
Agreement and the related agreements, documents and
This gr
instruments are and will be valid and binding obligations of the
t enforceable against the District in accordance with
District, g
their terms.
• Agreements and Instruments. The
c. Conflicting'
execution and Agreement deliveryof this A reement and the consummation of
the transactions
contemplated herein in accordance with the
P
terms hereof bythe District will not (1) violate any provision
of any law, judgment,order writ iunction or decree
injunction
MSC!175274.2I TU01O 00506
January 6, 1998
11
applicable to the District, (2) conflict with or result in a
breach of any of the terms, conditions or provisions of the
documents establishing the District or any agreement or
instrument to which the District is a party or by which it is
bound or to which it is subject, or (3) constitute a default, or
an event that with the passage of time or the giving of notice
or both would constitute a default under any of the foregoing.
• d. Filings, Consents and Approvals. With the
exception of the approval of the Pima County Board of
Supervisors of the Agreement and the consent of CAWCD and the
U.S. to the CAP Assignment, and the Judicial Validation, the
execution and delivery of this Agreement by the District and the
performance by the District of its obligations hereunder, do not
require the further consent, approval or action of, or any
filing with, or notice to, any corporation, person, firm, or any
federal, state, or other governmental department, commission,
board, bureau, agency, or instrumentality.
e. Litigation. The District is not bound by any
order, judgment, stipulation, or consent decree of any court or
other governmental authority, and there is no suit, action,
controversy or legal, administrative, arbitration or other
proceeding or governmental investigation pending or threatened :�-
against the District, which affects or if adversely decided
would affect the District's ability to consummate the
transactions contemplated in this Agreement.
f. Compliance with Laws. The District has complied
with all applicable laws, regulations and governmental orders
required for the valid and effective consummation of the
transactions contemplated in this Agreement.
g. Review of Agreement. The governing body of the
District has read this Agreement, its duly authorized
representatives have voluntarily signed it, it has consulted
with attorneys of its own selection, and it intends to be fully
and completely bound hereby.
12. R- • esentations Warrant' es and Covenants b the Cit
The City makes the following representations and warrants to and
covenants with the Districts. Each of the representations,
warranties and covenants shall be continuing and shall survive
the execution and delivery of this Agreement.
a. 0 an zat on Stand a Power. The city is
duly organized and validly existing.
b. Authorization; Enforceability. The City has full
power and authorityto execute and deliver this Agreement and to
consummate the transactions contemplated herein. The City's
execution and delivery of this Agreement and all related
agreements, documents, and instruments and the consummation by
ofthe transactions contemplated herein on behalf of
the City p
•
MSC/175274.2rTtJ01 a-00506
January 6, 1995
12
the City have been duly and validly authorized by all necessary
action on the part of the City. This Agreement and the related
agreements, documents and instruments are and will be valid and
binding obligations of the City, enforceable against the City in
accordance with their terms. The City warrants and represents
that it owns and can assign, subject to the Approvals, its
interest in the C.Ar AcKvignatent litili4itititiiirrit free and clear of any
::Yl:•.Y.'J:Y:ti1N V M%fI1/%Nti4M:'hY.Ylrl.•f 111I
prior claims thereon.
c. Conflicting Agreements and Instruments. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated herein in accordance with the
terms hereof by the City will not (1) violate any provision of
any law, order, writ, judgment, injunctionor decree applicable
to the City, (2) conflict with or result in a breach of any of
the terms, conditions or provisions of the documents
• establishing the City or any agreement or instrument to which
the City is a party or by which it is bound or to which it is
subject, or (3) constitute a default, or an event that with the
passage of time or the giving of notice or both would constitute
a default under any of the foregoing.
d. Filings: Consents and Approvals. With the
exception of the consent of CAWCD and the U.S. to the CAP
Assignment and the M
4i ` a:? ~:ae Judicial
�T•;�:'•::•':1JJ►til.LtiY►NWYr ':Nti:• •:�f:�y•••41Y.VV►KtiVIk•:\�{1.Yf
Validation, the exeaut or -and vciel•�ivery of Mils Agreement by the
City and the performance by it of its obligations hereunder, do
not require the further consent, approval or action of, or any
filing with, or notice to, any corporation, person, firm, orany
federal, state, or other governmental department, commission,
board, bureau, agency, or instrumentality.
e. Litigation. The City is not bound by any order,
judgment, stipulation, or consent decree of any court or other
governmental authority, and there is no suit, action,
controversy or legal, administrative, arbitration or other
proceeding or governmental investigation pending or threatened
p g
against the City, which affects or if adversely decided would
affect the City's ability to consummate the transactions
contemplated in this Agreement.
f. Compliance with Laws. The City has complied with
P
all applicable laws, regulations and governmental orders
required for the valid and effective consummation of the
transactions contemplated in this Agreement.
g.
Review of Agreement. The governing body of
its duly City has read this Agreement, authorized
representatives have voluntarily signed it, it has consulted
with attorneys of its own selection, and it intends to be fully
and completely bound hereby.
13. Releases.
MSC/175274.2P 11010.00506
January 6, 199*
13
13 . 1 Effective upon entry of the Judgment, and except
asP rovided below, the parties, to and for themselves, their
heirs, agents, administrators, successors and assigns,g , and any
and all others claiming through them or on their behalf, hereby
fully and forever release, acquit and discharge each other from
any and all actions, causes of action, class actions, suits,
debts, sumsmoney,of accounts, covenants, controversies,
y, judgments,
a eements romises, damages, executions, claims,
promises,� ' or in equity or in chancery
and demands, whatsoever, in law Y
"Claims") , that were brought in the Lawsuit or
that could have been brought by the Ci y(collectively, City or the Districts
relating to the Lawsuit with regard to the APA or the 1979
Agreement between the City and MWC or the implementation
thereof.
13 .2 Notwithstanding anything to the contrary,
a. Nothing in this Section 13 shall act or be
Y deemed to release the Cit or the Districts, or either or them
from their obligations under this Agreement; and
b. Nothing in this Agreement shall act to
release the City from any Claims that may have arisen or may
arise
relatingto the City's obligations under Article IV,
4.2 a of the APA to convey, deliver and sell the assets
Section ( •) taxes the Districts free and clear of any as of the Closing
Date.
14. District Bonds.
1 . parties The hereto acknowledge that MDWID must
maintain and improve the Districts' water systems and other
n p
the repayment period; that the Districts
properties throughout , p
b their voters to issue revenue bonds and
have been authorizedY water
systems repayment to pledge their revenues from the operation of their
to the re a ent of such bonds pursuant to Title 48,
,
Article VI Arizona Revised Statutes; and that the
Chapter 6, , ,
• 'n the repayment period, receive additional
Districts may, during
authorizations for additional revenue author i bond financings. In,
thereto, MDWID now has outstanding Special Assessment
addition ther ,
and Revenue Bonds issued pursuant to A.R.S. Title 48, Chapter 6,
Articles 1 and 2,
and Oro Valley now has outstanding Special Assessment Bonds issued pursuant to A.R.S. Title 48► Chapter 4,
the intention of the parties 2. It is hereto that therotected be
Districts' outstanding and future bondholders shall p City mayhave available to it in the
against any remedy the
event of the Districts' default or non-payment hereunder orhall mean any bonds
"Bonds" as used herein s
under the Judgment.
or other obligations payable from a pledge of MDWID's or Oro
Valley's revenues issued or
byon behalf of MDWID or Oro Valley or their municipal property corporations pursuant to any
provision of law.
MSC/17527.
SC/175274.2/TU010-0O506
Januapr 6,1994
14
14.2 To maintain the Districts' credit standing and to
assure the Districts, or either of them, that they may continue
to finance improvements, expansions, renovations and repairs of
or to their water systems and other properties, which in their
sole judgment are useful to the operation of their water systems
and other properties, the parties agree:
a. In consideration of the promises by the City
set forth in Subsections 14.2 (b) through 14.2 (i) below, the
Districts agree that, at all times during the term hereof, they
will set their rates, fees and charges for or water sales and water
services at sufficient levels to create net revenues available
fora ent of all of their bonds and all of their obligations
P � •
under this Agreement in the manner set forth below. The term
"Net Revenues" shall be defined as the gross revenues of the
Districts for anyfiscalyear hereafter less all costs of
operation, maintenance, extension and improvement,
replacement
and repair of the Districts' water systems and other properties
during the respective fiscal year. The Districts' water service
and delivery rates shall be set at a level which produces Net Revenues in each of the Districts' future fiscal years
sufficient to: •
(1) Pay principal al of and interest on all
Bonds now outstanding issued hereafter coming due in such
fiscal year;
(2) Pay all amounts due the City and CAWCD
hereunder in such fiscal year; and
(3) Produce additional Net Revenues which
immediately 12% greater than the cumulative of the immediately p recedin
g
Subsections 14.2 (a) (1) and 14.2 (a) (2) in such fiscal year.
b. All of the City's rights to payment
hereunder junior shall be and subordinate to the claims of all
holders of Bonds now or hereafter issued or outstanding.
c. Notwithstanding any default or failure of
the Districts, or either of them, to make a required payment
er the Citywaives all claims to, and forgoes payment
hereunder,
• have pledged, or will
from, any monies which the Districts P g
pledge, to the payment of principal rinci al and interest on any and all
Bonds now outstanding or hereafter issued.
d. The
Citywill not levy upon, claim or seek
possession or ownership of the Districts' water systems or other
properties, notwithstanding
that the Districts, or either of
them, may be in default hereof or of the Judgment.
e. The City will not seek, or support others
.
Bonds now outstanding or hereafter issued
who seek, to have any
declared illegal or unenforceable in any manner by any court or
MSC/175274.VTU01O OO506
January 6,1993
15
administrative forum, for the purpose of gaining an advantage
for the City in the payments due hereunder.
f. The Districts shall be allowed to set up
monthly or semi-annual deposits to a special account or accounts
either held by a District's treasurer or a bank which, pursuant
to terms of any bond indenture, contract, resolution,
intergovernmental agreement, or other agreement, which now
provides or shall hereafter provide for the deposit of system
revenues of the Districts, or either of them, in trust for the
benefit of MDWID's or Oro Valley's present or future
bondholders. Said amount or amounts so deposited or thereafter
to be deposited shall be protected against any execution,
garnishment, claim, action or remedy otherwise available to the
City in the event of a default or nonpayment hereunder or under
the Judgment.
g. Notwithstanding any District Default
hereunder dor under the Judgment) the City shall never seize or
exercise any remedy against any reserve fund created for any
Bonds now or hereafter issued, or against any moneys due, or to
become due, as reimbursement to any issuer of any surety bond,
loan agreement, lease agreement, insurance policy or other
credit or liquidity facility held for bondholders as, or in lieu
of, a reserve fund for any Bonds.
h. The City shall not seek to acquire the
Districts' water systems or other properties through the
exercise of the any of eminent domain so long as Bonds are
outstanding unless provision is made for protection of the
bondholders.
i. The Districts, or either of them, may prepay
this Agreement bytendering to the Trustee all outstanding
• � in relevant
Principal owed under Section 2 hereof, as modified
part bySection 9 hereof, if applicable, at any time without
penalty.
14.3 The Judgment shall provide that the court shall
retain jurisdiction to enforce the foregoing rate setting
provisions through mandatory inunction, mandamus or otherwise
and the Districts shall never contest the legality or
enforceability of this provision.
14.4 To the extent permitted by law, the provisions of
this Section 14 shall survive the petition of the Districts, or
either of them, for, or adjudication of, bankruptcy pursuant to
the Bankruptcy Code of the United States.
15. Treated CAP Water.
MSC1175274.210010.04506
January 6, 1996
16
15. 1 In any year in which the City is delivering
treated CAP water to its customers and only to the extent that
the City has CAP water and treatment and delivery capacity
available in excess of the CAP water and treatment and delivery
capacity required to meet the demands of its customers, the City
agrees to sell treated CAP water to the Districts or either of
them. The rate for such water shall exclude any capital
component for the costs of the treatment facilities and the
facilities of the City used to deliver such water to the
Districts, provided, however, that the City will not be required
to make any capital expenditure for the purposes of complying
with this Subsection.
15.2 In any year in which the City is delivering
treated CAP water to its customers, does not have excess CAP
water, but has treatment and delivery capacity available in
excess of the treatment and delivery capacity required to meet
the demands of its customers, the City agrees to treat CAP water
provided by the Districts, or either of them, to the extent of
such excess treatment and delivery capacity. The rate for such
water shall exclude (a) any capital component for the costs of
the treatment facilities and the facilities of the City used to
deliver such water to the Districts, and (b) CAWCD capital and
OM&R charges for the water, provided, however, that the City
expenditure not be required to make any capital for the
purposes of complying with this Subsection.
16. Severability. If any provision of this Agreement is
held by a court of law to be in violation in whole or in part of
any applicable licable local, state or federal ordinance, statute, law,
administrative or judicial decision, or public policy, and if
such court should declare such provision of this Agreement to be
illegal, invalid or unenforceable as written, then such
provision shall be modified to the minimum extent necessary to
make it or its application valid and enforceable, and the
rights, obligations and interests of the parties under the
remainder of this Agreement shall otherwise continue in full
force and effect. However, if either Section 2 or Section 3 of
this Agreement is held unenforceable, and the parties have been
unable to modifythe Section to the extent necessary to make it
its this entire Agreement
or application valid and enforceable, thi gr
shall be of no force and effect. In the event that this
Agreement is held unenforceable as to either of the Districts,
the remaining parties to this Agreement shall have the same
rights and obligations with respect to each other, pursuant to
Section 9 of this Agreement, as though the IGA had been
terminated or not renewed.
17. Additional documents. The parties agree to execute
such further documents as may be necessary to carry out the
terms and intent of this Agreement.
MSCf 175274.2PrU010-005 06
January 6, 1998
17 •
18. Entire Aareement. This Agreement contains the entire
Agreement between the parties, and the terms of this Agreement
are contractual, not merely a recital.
19. Counterparts/Facsimiles,. This Agreement may be
executed in counterparts, all of which when taken together shall
constitute one and the same instrument. The parties agree that
the deliveryof an executed copy hereof via facsimile
.• other partyhereto,
transmission shall, upon the receipt by any , .
have the same binding effect as though the original signed
Agreement had been delivered to such party.
20. No Admission. The parties, by reason of agreeing to
this Agreement, neither admit nor deny liability of any sort.
21. Recordation. This Agreement shall be recorded with
the County Recorder of Pima County, Arizona after the Agreement
has been approved bythe Pima County Board of Supervisors.
PP
22 . Renewal of the Judgment. Notwithstanding any contrary
provision in Section 1 above, the Districts agree that until
such time as the Cityhas been paid in full under the terms of
this the continuingright to
Agreement, the City shall have g
renew the Judgment under A.R.S. S 12-1611 et sea., or other
applicable law.
23. Successors and Assigns. This Agreement and all of the
terms androvisions hereof shall inure to the benefit and be
binding upon the successors and assigns s of all of the parties
hereto• provided, however, that neither District shall have the
t byitself or jointly with the other District, to assign,
nigh
either voluntarily or by operation of law, all or any portion of
its any rights or all or portion of its obligations under this
gCAP Assignment� nnlent
A reement im the beneficial interest in the 9
t#4iiii!l'ii.10040*. iiiiigiaiiiiiii$004*.fea,� � to successor water
exce t a:::: : : f: :::ti..:.�: .;:::: M :: :: ti.:uf::.:strict has demonstrated to the
P
rovic er, anc3� ei i� y after succi Di
satisfaction action of the City that the proposed assignee is capable
of timely meeting the payment obligations of such District
pursuant to this Agreement and has executed an agreement,
approvedby
in writingthe City, under the terms of which the
proposed assignee assumes the obligations of the District under
this Agreement.
24.
Amendment in Writina. No modification or amendment of
this Agreement shall be valid and binding unless it is in
writing, signedby the parties; if such modification or
amendment changes in anywaythe financial obligations of the
Districts or either of them, the modification or amendment shall
be approved by the Pima County Board of Supervisors.
parties Miscellaneous.
The agree and acknowledge that
with
time is of the essencerespect to this Agreement. If
lawsuit or other
the Lawsuit, or any other
action is taken in
enforcement proceeding brought,is brow ht, to enforce this Agreement or
MSC!1'75274.2/'TLJ010-00506
January 6, 1998
18
r •
the Judgment, the prevailing party shall be entitled to recover
�
the costs and expenses of such action and reasonable attorneys'
fees incurred. The Agreement shall be governed by and construed
in accordance with the laws of the State of Arizona.
26. Effective Date. This Agreement shall become effective
when the Agreement has been executed by all of the parties and
• � approved bythe Pima
their respective legal counsel and has been pp
County Board of Supervisors.
CITY OF TUCSON
By:
MAYOR
ATTEST: APPROVED AS TO FORM:
By: By:
City Clerk City Attorney
MS0175274.2rrU010-00506
Iaauaq 6,1998
19
METROPOLITAN DOMESTIC WATER
IMPROVEMENT DISTRICT
By:
CHAIRMAN OF THE
BOARD OF DIRECTORS
ATTEST: APPROVED AS TO FORM:
By: By:
Clerk of the Board Attorney for the
District
TOWN OF ORO VALLEY ON BEHALF OF ITS
DOMESTIC WATER IKEROVEKENT DISTRICT #1
By:
MAYOR
ATTEST: APPROVED AS TO FORM:
By: By:
Town Clerk Town Attorney
APPROVED pursuant to the provisions of
A.R.S. Section 48-1015 (1997) , the
day of , 199 •
PIMA COUNTY BOARD OF SUPERVISORS
By
Chairman
ATTEST: APPROVED AS TO FORM:
By: By:
�
Clerk of the Board Pima County
Attorney
MSCI175274.21 UOIO-oorSO6
January 6, 1998
20
.IND MOO MED M.41.. am ems an dm am.IND COMPARISON OF FOOTERS
-FOOTER
••.. ‘"-:"2.52, •- 0 0 5 0 6
: ....... .
.„..,...............................
M3C/175274.2frU010-00506
January 6,199$
21
4 eLtert+
F; r 5+ A---/vi e/vtaLst7fr
JAN-27-1998 14:31 MUNGER CHADWICK, P.L.C. 520 747 1550 P.02/06
FIRST AMENDMENT TO AMENDED AND RESTATED SETTLEMENT AGREEMENT
This First Amendment to Amended and Restated Settlement
Agreement (the "First Amendment") is entered into this day of
1998, by and between the City of Tucson (the "City") and
the Metropolitan Domestic Water Improvement District ("MDWID") and
the Town of Oro Valley on behalf of the landowners within its
Domestic Water Improvement District NO. 1 ("Oro Valley") . MDWID
and Oro Valley are referred to collectively as the "Districts" .
I. RECITALS
A. On December 17, 1997, the parties entered into an
agreement (the "Settlement Agreement") as a full and final
compromise and settlement of Cause No. 308139 in the Pima County
Superior Court of Arizona.
B. On January 28, 1998 the parties modified the Settlement
Agreement, said modifications being reflected in an Amended and
Restated Settlement Agreement.
C. The parties desire to modify the Amended and Restated
Settlement Agreement.
I I. AGREEMENT
The Amended and Restated Settlement Agreement is modified in
the following respects and to the following sections of the Amended
and Restated Settlement Agreement. Any Section or Subsection which
has been modified has been restated as modified. It is expressly
agreed by the parties that this First Amendment is supplemental to
the Amended and Restated Settlement Agreement which is made a part
hereof by this reference, and all terms, conditions, and provisions
of the Amended and Restated Settlement Agreement, unless
specifically modified, are to apply and are made a part of this
First Amendment as though expressly rewritten, incorporated, and
included herein.
The modified and restated Sections and Subsections of the
Amended and Restated Settlement Agreement are as follows:
Section 3 . Assignment of CAP Entitlement. Upon entry of the
Order, the City shall assign 9, 500 acre feet of the City' s
entitlement to CAP water
under the Subcontract (the "CAP
Assignment") to First Trust of Arizona (the "Trustee") , or such
substitute trustee as the parties may later mutually select, to
hold the CAP Assignment for the benefit of the Districts as First
Beneficiaries and for the City as Second Beneficiary. Attached
hereto as Exhibit "D" is a copy of the CAP Assignment in the form
to be executed by the City, the Districts and the Trustee. Until
the Judgment has been entered, the City shall provide to the
Districts full access to and use of up to 9,500 acre feet of CAP
1
� a r
JAN-27-1998 14:31 MUNGER CHADW I CK, P.L.C. '(4Y 1=0 r.U.VUb
water, so long as (i) the Districts are not in District Default as
defined in Subsection 8.2 below, and (ii) the Districts timely make
the payments to CAWCD for the Operations, MaintenanCe & Replacement
("OM&R" ) charges on the CAP water ordered by the City for the
Districts. After Judicial Validation as defined in Subsection 4 . 1
below has occurred, the Districts shall have full access to and use
of the 9, 500 acre feet of CAP water and enjoy a status equivalent
to other M&l CAP Subcontractors except as provided in the CAP
Assignment, the MDWID/Oro Valley Subcontract and the Trust
Agreement, so long as the Districts are not in District Default.
The respective portions of the 9, 500 acre feet of CAP water which
is the subject of the CAP, Assignment and the MDWID/Oro Valley
Subcontract, as between MDWID and Oro Valley, shall be as follows;
MDWID 8, 858 Acre Feet
Oro Valley 642 Acre Feet
Total 9, 500 Acre Feet
Section 9 .2 The Districts' have amended the IGA since
execution of this Agreement to provide that for purposes of this
Agreement the rights and obligations of the Districts in and to
water rights shall be calculated in accordance with the ratio
resulting from the proportional interests in the 9, 500 acre feet of
CAP water set forth in Section 3 above, namely: MDWID -- 93 .242%;
and Oro Valley - 6.758%. Such proportional interests and
responsibilities shall be referred to herein as the "MDWID Portion"
and the "Oro Valley Portion, " respectively.
Accordingly, if at any time during the Approval Period or
after the Judgment has been entered, the IGA is terminated or the
term of the IGA is not renewed, the rights and obligations of the
Districts under this Agreement shall be as follows:
a. MDWID shall be responsible for the payment of
93 . 242% of all payments due after termination or nonrenewal of the
IGA, pursuant to Subsection 2 (b) and Section 5 of this Agreement.
In the event of a District Default by MDWID thereafter, as defined
in Section 8 of this Agreement, the City shall, except t as
p
specifically provided in Section 14, be free of anyrestrictions
whatsoever against t
g executing upon or in any other way enforcing in
any lawful manner whatsoever the Judgment to the extent of the
aforesaid obligation of MDWID less only such amounts as shall have
been previously paid to the City pursuant to this Agreement..
. g In
the event of a District Default by MDWID, upon written notice to
the Trustee from the P
• City,. the Trustee shall immediately assign to
the City, if Judicial Validation has not ,
et occurred the "MDWID
Y
Portion" of the CAP Assignment, or the MDWID Portion of the
Trustee' s interest as Subcontractor in the Valley
Y
Subcontract if Judicial Validation has occurred. In addition, upon
2 i
DRAIFT
JAN-27-1998 14=32 MUNGER CHADWICKP.L.C. 520 747 1550 P.04/06
termination or nonrenewal of the IGA, MDWID shall be responsible
for paying 93 .2421 of the Districts' share of the Trustees' Fees
and Expenses .
b. Oro Valley shall be responsible for thea ent of
6. 758% of all payments due after P Ym
p ym f er termination or nonrenewal of the
IGA, pursuant to Subsection 2 (b) and Section 5of this Agreement.
In the event of a District Default by Oro Valleythereafter, as
defined in Paragraph 8 of this Agreement, the Cityshall, except as
specifically icallprovided in p•
p y • Section 14, in
be free of any restrictions
whatsoever against executing upon or in any other way enforcing in
any lawful manner whatsoever the Judgment to the extent of the
aforesaid obligation of Oro Valley, less only such amounts as shall
have been previously paid to the City pursuant to this Agreement.
In the event of a District Default by Oro Valley, upon written
notice to the TrusteeP
from the City, the Trustee shall immediately
assign to the City, if Judicial Validation has not yet occurred,
the "Oro Valley Portion" of
y the CAP Assignment, or the Oro Valley
Portion of the Trustee's interest as Subcontractor in the MDWID/Oro
Valley Subcontract if Judicial Validation has occurred. In
addition, upon termination or nonrenewal of the IGA, Oro Valley
shall be responsible for paying 6 .758 ' '
P Y g � of the I��strscts share of
the Trustees' Fees and Expenses.
c. MDWID shall have full access to, use of, and the
right to direct the Trustee with regard to the MDWID Portion of the
MDWID/oro Valley Subcontract, so long as MDWID is not in District
Default. Oro Valley shall have full access to, use of, and the
right to direct the Trustee with regard to the Oro ValleyPortion
of the MDWID/Oro valley Subcontract,
so long as Oro Valley is notin District Default.
d. Upon payment in full to the City of the amounts
required of MDWID under Section 2 as modified in relevantart
p by
Subsection 9.2 (a) n to MDWID the
MDWZD Portion of
above, the Trustee shall assign
g
the Trustee' s interest as Subcontractor in the
MDWID/Oro Valley Subcontract.
e. Upon the payment in full to the City of the amounts
required of Oro Valley under Section 2 as modified in relevanta
p rt
by Subsection 9.2 Cbl above,
the Trustee shall assign to Oro Valley
the Oro Valley Portion of the Trustee' s interest asco
Sub retractor.
Section 14 .1 The parties hereto acknowledge that MDWID
Valleymust maintain � g Districts' and Oro
and improve the their respective
water systems and other properties throughout the repayment
that the Districts have beenP �ent
authorized by their voters to issue
revenue bonds and to pledge their revenues from the operation of
their water systems to the repaymentp
Title 48, Chapter of such bonds pursuant to
P er 6, Article VI, Arizona Revised Statutes; and that
the Districts may, during the repaymenteriod receive ive additional
3
DRAFT
ii
JAN-27-1998 14:32 MUNGER CHADWICK, P.L.C. 520 747 1550 P.05/06
voter authorizations for additional revenue bond financings. In
addition thereto, MDWID now has outstandingS ecial Assessment P and
Revenue Bonds issued pursuant to A.R.S. Title 48, Chapter
Articles 1 and 2, and Oro valleynow P 6,
has outstanding Special
Assessment Bonds issued pursuant to A.R.S. Title 48, Chapter
Article 2 . It is the intention p 4,
of the parties hereto that the
Districts' outstanding and future bondholders shall
be protected
against any remedy the City may have available to it in the event
of the Districts'
default or non-payment hereunder or under the
Judgment. "Bonds" as used herein shall mean an
obligations y bonds or other
g payable from a pledge of MDWID's or Oro Valley' s
revenues issued by or on behalfof
MDWID or Oro Valley or their
municipal property corporations pursuant to anyprovision P on of law.
Section 14 .2 (i. ) The Districts, or either of them, may
prepay this Agreement bytenderingto the
Trustee a�.], outstanding
Principal owed under Section 2 hereof, as modified in
relevant
part by Section 9 hereof, if applicable, at anytime
penalty.
without
Section 14 .2 (1. ) The Districts, or either of them, may
prepay at any time, in whole or in part, and without penalty,
their respective obligations to n y'
this 9, the City under Section 2 of
Agreement, as modified in relevantpart by Section
by tenderingto the 9 tom,
Trustee payment (s)s) of outstf anding Principal
intended for such purpose.
This First Amendment shall become of fecti4re when this First
Amendment has been executed by all of the parties and '
respective legal counsel. their
CITY OF TUCSON
By:
Mayor
ATTEST: APPROVED AS TO FORM:
METROPOLITAN DOMESTIC WATER
IMPROVEMENT DISTRICT
By:
CHAIRMAN OF THE
BOARD OF DIRECTORS
4
DRAIFT
JAN-27-1998 14 33 MUNGER CHADIJICKP.L.C. 1 520 747 1550 P.06/06
ATTEST: APPROVED AS TO FORM:
$y• By: _
Clerk of the Board Attorn" y for the District
TOWN OF ORO VALLEY ON BEHALF OF ITS
DOMESTIC WATER IMPROVEMENT DISTRICT #1.
By:
ATTEST: APPROVED AS ITO FORM:
By:
Town Clerk Town Attorney
Di\work\latry\orovalle\fetamen.doc
5
TOTAL P.06
R65 1 u lion
RESOLUTION NO. (R) 98- OS
A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF ORO
VALLEY, ARIZONA, AUTHORIZING AND APPROVING THE EXECUTION
OF AN AMENDED AND RESTATED SETTLEMENT AGREEMENT WITH
CONDITIONS BETWEEN THE TOWN OF ORO VALLEY, THE CITY OF
TUCSON, AND THE METROPOLITAN WATER DISTRICT (MDWID).
WHEREAS, the Town of Oro Valley has the responsibility of caring for the welfare of its
citizens; and
WHEREAS, the Town of Oro Valley has the authority to settle lawsuits and enter into
contracts to provide for the health, safety and welfare of its citizens; and
WHEREAS, approval of an amended and restated settlement agreement with the City of
Tucson and Metropolitan Water (MDWID) regarding Central Arizona Project water is
found to be in the Town's best interests; and
NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND TOWN COUNCIL OF
THE TOWN OF ORO VALLEY, ARIZONA AS FOLLOWS:
1 . That the amended and restated settlement agreement attached hereto between
the City of Tucson, The Metropolitan Water District (aka MDWID) and the Town
of Oro Valley providing for the terms of Central Arizona Project Water are hereby
approved, subject to any such modifications as are found necessary by Town Staff
and the approval by the other entities of the First Amendment to this document.
2. That the Town Manager and all necessary administrative officials and employees
are hereby directed and authorized to take all necessary steps related to the
execution of said agreement.
3. That copies of this document shall be kept on file at the offices of the Town Clerk
4. That Resolution (R) 97-75 is expressly declared null and void with the adoption of
this resolution, contingent upon the other entities passing the First Amendment.
Should any part of the agreements be found to be of no effect by a court of
competent jurisdiction,that portion of the agreement is severable and will not effect
the remainder of the document.
PASSED AND ADOPTED by the Mayor and Town Council of the Town of Oro Valley,
Arizona this day of , 1998.
TOWN OF ORO VALLEY, ARIZONA
Cheryl Skalsky, Mayor
ATTEST:
Kathryn E. Cuvelier, Town Clerk
APPROVED AS TO FORM:
Tobin Sidles, Town Attorney