|
Back to Calendar
Return
|
| |
Item # 3.
|
| Town Council Regular Session |
|
|
|
| Information |
| SUBJECT: |
| RESOLUTION NO. (R)17-14, AUTHORIZING AND APPROVING AN INTERGOVERNMENTAL AGREEMENT BETWEEN THE METROPOLITAN DOMESTIC WATER IMPROVEMENT DISTRICT, THE TOWN OF MARANA AND THE TOWN OF ORO VALLEY RELATING TO THE PARTNERSHIP FOR THE DESIGN, CONSTRUCTION, MANAGEMENT, OPERATION AND MAINTENANCE OF THE NORTHWEST RECHARGE, RECOVERY AND DELIVERY SYSTEM |
| RECOMMENDATION: |
| On March 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 Town of Oro Valley Water Utility desires to deliver its Central Arizona Project (CAP) water through a regional project with Metro Water and the Town of Marana utilities known as the Northwest Recharge and Recovery Delivery System (NWRRDS). Our CAP water will be stored underground at the Lower Santa Cruz Replenishment Project, Avra Valley Recharge Project and/or BKW Farms Ground Water Savings Facility. The Town of Oro Valley Water Utility desires to deliver our recovered CAP water through the NWRRDS, which consists of recovery wells, pipeline and reservoir that are shared through contractual capacity in accordance with the IGA. From the NWRRDS reservoir, Oro Valley will then transport the water to the Oro Valley Water Service Area through a booster pump station and pipeline, which will be independently owned and operated by Oro Valley.
The major elements of the IGA are as follows:
- The term of the agreement is through June 30, 2075.
- The agreement has a clause to withdraw prior to the commencement of construction.
- The Town of Oro Valley Water Utility will have the contractual right to an allocated capacity of 4,000 acre-ft per year within the
NWRRDS.
- Metropolitan Domestic Water Improvement District will be the operating agent for the NWRRDS system.
- The agreement establishes a 3-member committee with a representative from each utility to oversee the NWRRDS project.
- The agreement details the design, construction, management, operation and maintenance of the NWRRDS system.
- Oro Valley's portion of the cost of the shared NWRRDS project is estimated at $12,467,660. The independent pipeline cost is
$11,182,340, for a total cost to Oro Valley of $23,650,000. |
| BACKGROUND OR DETAILED INFORMATION: |
In a joint regional effort, the Metropolitan Domestic Water Improvement District, the Town of Marana, and the Town of Oro Valley Water Utility have developed an Intergovernmental Agreement relating to the partnership for the design, construction, management, and operation and maintenance of the Northwest Recharge, Recovery and Delivery System (NWRRDS). This water production and delivery system will deliver and recover stored and recharged Central Arizona Project (CAP) water from recovery wells and deliver it to a shared reservoir. From this reservoir, each party will independently build a booster pump and pipeline system to deliver and transport their recovered CAP water to their respective service areas.
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 utilization of this partnership agreement saves on capital, as well as operations & maintenance costs as compared to wheeling costs through the Tucson Water system. In addition, the NWRRDS provides for future renewable water supply for our growing community.
The major elements of the IGA are as follows:
- The term of the agreement is through June 30, 2075.
- The agreement has a clause to withdraw prior to the commencement of construction.
- The Town of Oro Valley Water Utility will have the contractual right to an allocated capacity of 4,000 acre-ft per year within the
NWRRDS. The project will be owned by Metro Water.
- The Metropolitan Domestic Water Improvement District will be the operating agent for the NWRRDS system subject to the terms
and conditions of the IGA.
- The agreement establishes a 3-member committee with equal voting rights to oversee the NWRRDS project. The members of the
NWRRDS Committee will be the Director of the Oro Valley Water Utility, Director of the Marana Water Utility, and the General
Manager of the Metropolitan Domestic Water Improvement District. The Committee Chair is rotated annually.
- As operating agent, the Metropolitan Domestic Water Improvement District is responsible for the design, construction,
management, and operation of the project.
- The NWRRDS Committee will participate in and vote on the design, construction, management and operations.
- Individual parties will be responsible for their own debt financing.
- If Operating Agent assigns its rights to another party, the remaining parties vote for a new Operating Agent.
- The total estimated cost of the regional NWRRDS project is $28,287,000. Oro Valley's share of this cost is $12,467,660
The NWRRDS partnership ends at the reservoir located near Twin Peaks Road and Lambert Lane. From this location, each party will independently deliver their recovered CAP water to their respective service areas. The booster pump and pipeline system independently owned and operated by Oro Valley is estimated to be an additional cost of $11,182,340.
Water Utility staff has worked closely with Metro Water and Marana utilities to develop the project configuration and estimated costs. |
| FISCAL IMPACT: |
The capital investment for Oro Valley under the IGA is estimated at $12,467,660 and represents our share of the capital costs required to develop the NWRRDS project. An estimated additional capital investment of $11,182,340 is required to design, and construct the remaining portion of the infrastructure required to then transport the water from the NWRRDS to the Oro Valley Water Service Area, which will be independently owned and operated by Oro Valley Water Utility. The total capital cost is estimated to be $23,650,000 for Oro Valley.
NWRRDS financing will need to be available in Fiscal Year 2020-21 when NWRRDS construction is expected to begin. Proposed financing could come from the issuance of bonds and/or loans from the Water Infrastructure Finance Authority (WIFA). Debt service payments would be funded through Groundwater Preservation Fees (50%) and Impact Fees (50%). Annual debt service amounts will be based on the final amount financed, the term of the financing and the prevailing interest rates at the time the financing is secured.
A net present value analysis for the NWRRDS costs as compared to the costs for wheeling our CAP water through the Tucson Water system shows that the NWRRDS project is more economical and cost effective. |
| SUGGESTED MOTION: |
| I MOVE to (approve or deny) Resolution No. (R)17-14, authorizing and approving an intergovernmental agreement between the Metropolitan Domestic Water Improvement District, The Town of Marana, and The Town of Oro Valley relating to the partnership for the design, construction, management, operation and maintenance of the Northwest Recharge, Recovery and Delivery System. |
|
|
|