Print Reading Mode Back to Calendar Return
  Item # 4.       
Town Council Regular Session
Meeting Date: 03/15/2017  
Requested by: Peter Abraham Submitted By: Mike Standish, Town Clerk's Office
Department: Water  
Information
SUBJECT:
RESOLUTION NO. (R)17-09, AUTHORIZING AND APPROVING AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TUCSON AND THE TOWN OF ORO VALLEY RELATING TO THE DELIVERY OF CENTRAL ARIZONA PROJECT WATER
RECOMMENDATION:
On February 13, 2017, the Oro Valley Water Utility Commission voted unanimously to recommend to Town Council to approve the IGA. Staff also recommends approval.
EXECUTIVE SUMMARY:
The existing Intergovernmental Agreement (IGA) with the City of Tucson and the Town of Oro Valley relating to the delivery of Central Arizona Project (CAP) water expires in 2017. Terms for a new IGA were negotiated between the City of Tucson Water Department and the Town of Oro Valley Water Utility for the continued delivery of Central Arizona Project Water. The resulting IGA is attached for Council's consideration.

The major elements of the IGA are as follows:
  • The agreement allows for delivery of up to 2,000 acre-feet per year with an additional as-available 600 acre-feet per year.
  • The agreement allows for additional deliveries up to a total of 4,000 acre feet per year.
  • The term of the agreement is 10 years and is renewable for an additional 10 years subject to agreement by the OVWU director and the Tucson Water director.
  • The cost per acre foot to be paid to Tucson Water by OVWU will start at a base rate of $419.65 per acre foot for year 2017 plus a power charge ranging between $115.50 to $158.65 per acre foot depending on delivery location. The base rate and power charge will increase annually according to the rates and charges applied to and adopted by the City of Tucson Mayor and Council. This is an increase of $71.51 per acre foot over the current rate.
  • OVWU will control and operate daily deliveries.
 The IGA is scheduled for consideration by the Tucson City Council at their March 21, 2017 meeting. 
BACKGROUND OR DETAILED INFORMATION:
In cooperation with Tucson Water (TW), the Oro Valley Water Utility (OVWU), has developed a revised intergovernmental agreement for the delivery of our Central Arizona Project (CAP) water through the TW System.  This IGA represents further regional cooperation for the delivery of additional CAP water to Southern Arizona, which benefits the aquifer by reducing reliance on groundwater supplies. The delivery of our CAP water through the TW system under this IGA will protect and preserve our groundwater.

The major elements of the IGA are as follows:
  • The agreement allows for delivery of up to 2,000 acre-feet per year with an additional as-available 600 acre-feet per year.
  • The agreement allows for additional deliveries up to a total of 4,000 acre feet per year.
  • The term of the agreement is ten years and is renewable for an additional ten years subject to agreement by the OVWU Director and the Tucson Water Director.
  • The cost per acre foot to be paid to Tucson Water by OVWU will start at a base rate of $419.65 per acre foot for year 2017 plus a power charge ranging between $115.50 to $158.65 per acre foot depending on delivery location.  The base rate and power charge could change annually according to the rates and charges applied to and adopted by the City of Tucson Mayor and Council. This is an increase of $71.51 per acre foot more than the current rate.
  • The base rate will increase annually based upon the rate increases and revenue requirement increases approved by the Tucson City Council for all of its customers.
  • The base rate and the capital cost allocation will be reviewed and adjusted, if needed, every five years.
  • OVWU will control and operate daily deliveries.
  • Water use will be metered, billed and paid on a monthly basis.
  • OVWU will store CAP water in the TW recharge facilities - Central Avra Valley Storage and Recovery Project and Southern Avra Valley Storage and Recovery Project.
  • TW will then pump the stored water from their recovery wells into its system and then deliver it to the OVWU Water Service Area and Countryside Service Area.
  • OVWU will pay for any losses to the aquifer, losses due to evaporation and 4% system loss.
  • The agreement provides for the transfer of long-term storage credits if necessary.
  • Any unused balance stored in TW facilities can be recovered by OVWU at the end of the term.
  • Tucson will have first priority to store its water and OVWU will have priority over any other subsequent agreements for storage in TW facilities.
  • This IGA eliminates an obligation for payment of stranded costs by Tucson Water to Oro Valley from a previous 2004 IGA that is no longer in effect.
Approval of this resolution and IGA will defer major capital costs and allow for time to plan for additional infrastructure for the delivery of our CAP water.

 
FISCAL IMPACT:
Under the terms of this IGA, the cost for delivery of our CAP water will increase by $71.51 per acre-foot from $499.89 to $571.40 per acre-foot. This represents a budget increase of approximately $150,000 for FY 17-18. This increase was considered in the recent Oro Valley Water Utility rate increase, and funds will be budgeted for this increase in FY 17-18.  

 
SUGGESTED MOTION:
I MOVE to (approve or deny) Resolution No. (R)17-09, authorizing and approving an Intergovernmental Agreement between the City of Tucson and the Town of Oro Valley relating to the delivery of Central Arizona Project Water.
Attachments
(R)17-09 CAP Wheeling Agreement
Attachment A - City of Tucson - Oro Valley CAP Wheeling Agreement

    

Level double AA conformance, W3C WAI Web Content Accessibility Guidelines 2.0

AgendaQuick ©2005 - 2024 Destiny Software Inc. All Rights Reserved.