April 2025_El Mirage_Surprise_2nd Amendement to water IGA
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SECOND AMENDMENT TO THE 2009 INTERGOVERNMENTAL AGREEMENT FOR WATER SERVICE BY THE CITY OF EL MIRAGE TO THE CITY OF SURPRISE WITHIN THE SURPRISE ORIGINAL TOWNSITE This Second Amendment (“Amendment”) is made by and between the CITY OF EL MIRAGE, ARIZONA (“El Mirage”) and the CITY OF SURPRISE, ARIZONA (“Surprise”), both Arizona municipal corporations. El Mirage and Surprise may be referred to in this Amendment each individually as a Party, and collectively as the Parties. This Amendment shall become effective on the date it is approved by each Party’s City Council (the “Effective Date”). RECITALS A. On or about March 2, 1977, the Parties entered into (and later extended in January 2002) an agreement pursuant to which El Mirage agreed to provide water service to the Surprise Original Townsite (“OTS”). B. On or about September 21, 2009, the Parties entered into the 2009 Intergovernmental Agreement For Water Service By The City of El Mirage to the City of Surprise Within the Surprise Original Townsite (“IGA”) for the purpose of setting forth the terms and conditions according to which El Mirage would continue to provide water to the OTS and ensure that OTS customers consistently and reliably receive potable water meeting all regulatory and statutory requirements. C. The Parties amended the IGA on or about February 2, 2017, (“First Amendment”) by adding Paragraph 5.13 in which the Parties agreed El Mirage would suspend assessment of recharge water fee(s) to its customers within the OTS in exchange for Surprise remitting quarterly payments directly to El Mirage based on the Red Oak Consulting Study dated August 26, 2011, and adopted by El Mirage City Council on November 10, 2011. D. The First Amendment terminated on June 30, 2021, resulting in El Mirage reinstating its water recharge fee(s) assessment against OTS customers. E. On September 4, 2024, the El Mirage City Council authorized a contract for a new utility rate study. F. On May 6, 2025, the El Mirage City Council will consider adopting the City of El Mirage’s 2025 utility rate study, including a $0.00 water recharge fee, payable by Surprise or the residents of the OTS, effective July 1, 2025. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants contained in this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Paragraph 5.13 of the IGA shall be amended as follows: a. Effective for billings after April 30, 2016, through June 30, 2021, charges to customers of the El Mirage water system related to recharge water within the OTS were suspended, and the City of Surprise was assessed directly for the costs related to recharge water within the OTS. Effective July 1, 2021, El Mirage began charging Surprise residents in the OTS for recharge water fees. Upon mutual written agreement of the Parties following El Mirage’s adoption of its 2025 utility rate study, the Parties agree as follows: Following the approval of this Second Amendment to the IGA by both Surprise’s and El Mirage’s respective City Councils, and upon approval and adoption by the El Mirage City Council of the 2025 utility rate study, Surprise will convey to El Mirage 6,560 acre-feet of extinguishment credits as identified in Exhibit A, attached hereto and incorporated herein by this reference, no later than August 31, 2025. This conveyance will be for a lump sum of 6,560 acre feet of extinguishment credits that will satisfy El Mirage’s estimated ten-year recharge volume identified in Exhibit A attached hereto, effective immediately through June 30, 2034. El Mirage shall immediately approve, enforce, and collect a $0.00 water recharge fee for Surprise’s residents in the OTS which shall be effective until at least June 30, 2034, or the length of the mutual written agreement and any renewals or extensions thereof, whichever is longer. It is anticipated that the next lump sum conveyance, if any, will be calculated on or before December 30, 2034, for the period commencing July 1, 2035, subject to the review and approval of each City Council which shall be documented in an amended, or new, IGA. The Parties currently anticipate that any subsequent conveyances, would occur at intervals of approximately ten years, contingent upon the authorization of the respective City Councils. 2. To the extent the terms and conditions set forth in the IGA vary from those in this Amendment, the provisions of this Amendment shall take precedence. All other terms and conditions contained in the IGA shall remain in full force and effect. 3. This Amendment shall have a term of ten (10) years commencing upon its full execution and may be extended upon written agreement of the Parties. 4. The above Recitals and all Exhibits attached hereto are fully incorporated herein by this reference. IN WITNESS WHEREOF, the Parties have executed this Amendment as of the Effective Date. FOR CITY OF SURPRISE: FOR CITY OF EL MIRAGE: __________________________________ Kevin D. Sartor Date Mayor ____________________________________ Alexis Hermosillo Date Mayor Approved as to form only: ____________________________________ Surprise City Attorney Date Attestation: ____________________________________ Kristi Passarelli Date Surprise City Clerk Attestation: ____________________________________ Jill Boltz Date El Mirage City Clerk IN ACCORDANCE WITH A.R.S. §§ 11-201, 11-251, AND 11-952, THIS AMENDMENT NO. 4 HAS BEEN REVIEWED BY THE UNDERSIGNED ATTORNEY WHO HAS DETERMINED IT IS PROPER IN FORM AND WITHIN THE POWERS AND AUTHORITY GRANTED TO CITY OF EL MIRAGE UNDER THE LAWS OF THE STATE OF ARIZONA. APPROVED AS TO FORM: ________________________________________ El Mirage City Attorney Date Exhibit A: Calculated Water Extinguishment Credits City of Surprise - Original Townsite Estimated Annual Recharge Volumes July 2025 through June 2035 Fiscal Year (July 1 through June 30) Estimated Recharge Volume in Acre Feet FY26 627 FY27 633 FY28 640 FY29 646 FY30 652 FY31 659 FY32 666 FY33 672 FY34 679 FY35 686 Total 6560 Notes: * Estimated recharge volume is based on a 64% effluent recharge return. * 1% escalator for growth is calculated for the 10-year period.