Exhibit A - 2024 NMIDD GSF Agreement
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GROUNDWATER SAVINGS FACILITY STORAGE
AGREEMENT BETWEEN NEW MAGMA IRRIGATION &
DRAINAGE DISTRICT AND THE CITY OF CHANDLER.
1.
PARTIES
The Parties to this Groundwater Savings Facility Storage Agreement (the “Agreement”)
are the NEW MAGMA IRRIGATION & DRAINAGE DISTRICT (“NMID”) and the CITY
OF CHANDLER (“Chandler”).
1.1
NMID is a political subdivision of the State of Arizona formed pursuant to A.R.S.
§ 48-2901 et seq. and is authorized to enter into this Agreement pursuant to A.R.S. §§
11-952, 48-2901, and 48-2978.
1.2 Chandler is a political subdivision of the State of Arizona formed pursuant to Arizona
Constitution, Article 13, & 2, and is authorized to enter into this Agreement pursuant to
A.R.S. § 11-952, and A.R.S. §§ 9-240 and 9-511.
2.
RECITALS
2.1
The purpose of this Agreement is to provide for the storage of up to 10,000 acre-
feet annually of Central Arizona Project (“CAP”) water by Chandler at the Groundwater
Savings Facility operated by NMID to maximize and enhance the delivery and use of
CAP water and, at the same time, to minimize utilization of groundwater by NMID by the
use of In-Lieu Water, as defined by A.R.S. §45-802.01.
2.2
The Parties recognized that this Agreement is subject to agreements entered
into by Chandler which is entitled to receive the delivery of CAP water, including without
limitation, the “Subcontract among the United States, the Central Arizona Water
Conservation District and Providing for Water Service” and the “Agreement Between the
Central Arizona Water Conservation District and the City of Chandler providing for the
delivery of excess Central Arizona Project Water.”
3.
DEFINITIONS
3.1 “ADWR” shall mean the Arizona Department of Water Resources.
3.2 “ADWR Review process” shall mean actions taken by NMID to attempt to overturn
any determination made by the ADWR that Long-Term Storage Credits should not be
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awarded to Chandler because NMID had violated the GSF permit. Chandler shall grant
NMID the time necessary for NMID to appeal to the appropriate ADWR staff or to the
ADWR director; to complete an ADWR administrative hearing; and/or, to complete a
lawsuit against ADWR seeking to cause ADWR to award Long-Term Storage Credits to
Chandler.
3.3 “CAP” shall mean the Central Arizona Project, a federally authorized reclamation
project under the ownership of the United State and operated by the Central Arizona
Water Conservation District.
3.4
“CAWCD” shall mean the Central Arizona Water Conservation District, a multi-
county special district created under the laws of Arizona under Title 48, Arizona Revised
Statutes.
3.5
“Chandler Water” shall mean CAP water be made available to NMID under this
Agreement for use on a gallon-for-gallon substitute basis directly in lieu of groundwater
that otherwise would have been pumped from the Phoenix Active Management Area by
NMID.
3.6
“Default” shall mean any material breach of the Agreement by a Party.
3.6
“GSF Permit” shall mean the ADWR Groundwater Savings Facility Permit issued
to NMID under Number 72-534888.0007, including any amendments, modifications, or
renewal thereof authorizing approximately 54,000 acre-feet of groundwater pumping to
be displaced within the NMID Facility on an acre-foot for acre-foot basis by the receipt of
In-Lieu Water for use in the NMID Facility.
3.7
“NMID Contribution” is the amount paid to Chandler for Water under section 9 of
this Agreement.
3.8
“NMID Facility” is a storage facility as defined in A.R.S. § 45-802.01(18) and for
this Agreement it shall mean the groundwater savings NMID is permitted to operate by
the GSF Permit.
3.9
“Party” or “Parties” shall mean either one, or in the plural, both of the parties to
this Agreement.
3.10 “Water Storage Permit” is defined in A.R.S. § 45-802.01(24) and for this
Agreement it shall mean the water storage permit issued to Chandler by ADWR
authorizing the storage of Chandler Water at the NMID Facility.
3.11 The following terms shall have the meanings ascribed to them by A.R.S. § 45-
802.01:
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“Aquifer”, “In Lieu Water”, “Recipient”, “Storage Amount” and “Stored Water”.
4.
EFFECTIVE DATE
This Agreement shall be effective as of January 1, 2024 when fully executed by both
Parties.
5.
TERM, RENEWAL AND CANCELLATION
5.1 The initial term of this Agreement shall expire on December 31, 2026 but shall
automatically renew for successive terms of one year thereafter, unless either Party
delivers to the Party written notice of the cancellation of this Agreement not less than
ninety (90) days prior to the expiration of the then-current term. Such termination shall be
effective at the end of the then-current term unless otherwise agreed in writing by the
Parties.
5.2
This Agreement may also be terminated for any of the following reasons:
5.2.1 If ADWR notifies Chandler that it will not earn Long-Term Storage Credits
for Water delivered to the NMID Facility because ADWR determined that NMID
violated the terms and conditions of the GSF permit, then Chandler may terminate
this Agreement, which termination shall be effective fifteen (15) days after mailing
written notice of termination to NMID.
5.2.2 Upon mutual written agreement of the Parties.
5.2.3 In accordance with the provisions of A.R.S. § 38-511.
5.2.4
In the event of a Default that remains uncured more than thirty (30) days
after the non-defaulting Party provides notice of the Default in accordance with
Section 14 below.
5.3
Termination of this Agreement shall not relieve either Party of the obligation to
accept deliveries of Chandler Water that had been scheduled with CAWCD in accordance
with this Agreement prior to notice of termination and to make payments due pursuant to
this Agreement. This provision shall not limit the Parties’ right to reduce or discontinue
deliveries in accordance with the terms of this Agreement.
5.4
The Parties’ rights under this Agreement to collect any monies owed and to
indemnification under this Agreement shall survive the termination of this Agreement.
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6.
CONDITIONS PRECEDENT TO DELIVERY
The delivery and use of water under this Agreement is conditioned on the following and
the Parties agree that:
6.1
NMID, at its expense, maintains the GSF Permit and operates the NMID Facility
in accordance with the GSF Permit, including filing annual reports with the ADWR,
associated with maintaining the GSF Permit and paying groundwater withdrawal fees to
ADWR pursuant to A.R.S. § 45-873.01.
6.2
Chandler, at its expense, shall obtain and maintain the Water Storage Permit,
including filing annual reports with ADWR, associated with maintaining the Water Storage
Permit and paying any long-term storage credit recovery fees collectible pursuant to
A.R.S. § 45-874.01.A.
6.3
Each Party shall cooperate and provide information required by the other Party
to obtain or conform to the requirement of either the GSF Permit or the Water Storage
Permit.
6.4 Chandler shall annually determine, at its sole discretion, whether Chandler Water is
available to deliver to NMID under this Agreement, subject to the right to halt deliveries
as set forth in this Agreement.
6.5
All uses of Chandler Water by NMID shall be consistent with all applicable
Arizona and federal laws and any agreement under which NMID receives such water and
shall be used only at the NMID Facility on a gallon-for-gallon substitute basis directly in
lieu of groundwater that NMID otherwise would have pumped from the Phoenix Active
Management Area.
6.6
NMID’s use of Chandler Water at the NMID Facility shall at all times comply
with the plan of operation of the GSF Permit required by A.R.S. § 45-812.01. If the GSF
Permit for the NMID Facility is suspended, cancelled or expires for any reason NMID shall
immediately notify Chandler and deliveries of Chandler Water will be discontinued
immediately.
7.
SCHEDULING OF DELIVERIES
7.1
On or before August 1st of each year, Chandler shall notify NMID in writing of
the amount of Chandler Water that will be made available for use by NMID to be stored
in the NMID Facility during the following year.
7.2
On or before September 30th of each year, Chandler shall submit an order to
CAWCD for CAP water (the “CAP Water Order”) in an amount equal to the quantity of
Chandler Water that NMID has agreed to use as In-Lieu Water during the following year.
7.3
NMID and Chandler shall mutually agree upon the monthly schedule of its use
of Chandler Water for the following year. NMID shall confirm such monthly water delivery
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schedule on or before September 30th of each year. Chandler shall submit a monthly
water delivery schedule to CAWCD as part of its CAP Water Order. The Parties agree
that such monthly water delivery schedule is an estimate of how NMID may schedule the
Chandler Water during the following year.
7.4
Chandler shall authorize NMID to order Chandler Water for delivery to the NMID
Facility directly from CAWCD. The amounts, times, and rates of delivery of water to NMID
may be adjusted if agreed upon by both Parties, but cumulatively shall not exceed the
amounts otherwise established in accordance with this section for any calendar year.
8. REDUCTION OR DISCONTINUATION OF DELIVERIES
8.1
Chandler may reduce or discontinue deliveries of Chandler Water to NMID
under this Agreement at any time in one or more of the following events:
8.1.1
ADWR notifies Chandler that, after NMID had unsuccessfully
concluded an ADWR Review Process, and all other legal remedies had been
exhausted, NMID had violated the GSF Permit or plan of operation
associated with the NMID Facility with the result that ADWR would not award
Long-Term Storage Credits to Chandler.
8.1.2
Chandler has been informed by the entity supplying water that the
amount of Water has been or will be reduced; and, in its sole discretion,
determines deliveries of water under this agreement must be reduced or
discontinued as a result.
8.1.3
During any period when NMID fails to timely pay for water as
provided for under this Agreement until such payment has been received.
8.2
Chandler may reduce or discontinue deliveries of Chandler Water to NMID under
this Agreement for any reason not specified in Section 8.1 above, provided that
Chandler notifies NMID in writing on or before March 31 of any year in which Chandler
elects to reduce or discontinue deliveries of Chandler Water to NMID pursuant to this
Section 8.2.
8.3
Chandler shall provide NMID with no less than fifteen (15) days written notice
prior to any reduction or discontinuance of Water Deliveries, except where such notice
impracticable and then Chandler shall provide such notice as soon as practical.
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9.
COST OF WATER
9.1
The Parties agree that, subject to the provisions of this section, NMID’s share
of the cost of water delivered to NMID under this Agreement shall be Twenty-Five-Dollars
($25.00) per acre-foot for 2024 and for each year thereafter, unless the Authorized
Representatives agree on a different cost per acre-foot.
9.2
On or before February 1st of each year, Chandler will send NMID an invoice,
including the “CAP Water Use Accounting Report,” for NMID’s share of the cost of
Chandler Water delivered to NMID in the previous calendar year. NMID will remit
payment to Chandler within 45 days of receipt.
9.3
Should ADWR determine that Chandler Water used by NMID pursuant to this
Agreement was ineligible for stored water credit due to any action or inaction of NMID,
then NMID shall pay to Chandler all charges paid to CAWCD, or other third party, for
water delivered to the NMID Facility for which Chandler did not accrue Long-Term
Storage Credits, less any amount NMID previously paid. Such payment shall be made
within ninety (90) days of written notification to NMID of the ADWR’s final decision to deny
Long-Term Storage Credits. In the event that ADWR withholds Long-Term Storage
Credits from Chandler due to NMID’s excess groundwater usage, NMID will make best
efforts to promptly remedy the deficiency so that Long-Term Storage Credits are restored
to Chandler.
9.4
The authorized representatives, as identified in Section 14 below, may agree
that any payment due Chandler under this Section may be paid directly by NMID to the
entity imposing the charge on Chandler.
10.
NO ALLOCATION OF WATER OR JOINT ENTERPRISE
10.1 Nothing in this Agreement shall be construed as requiring Chandler to provide
Chandler Water to NMID in any year; and, nothing in this Agreement shall be construed
as requiring NMID to accept deliveries of Chandler Water in any year except that NMID
agrees to accept deliveries of Chandler Water made and accepted by CAWCD pursuant
to Section 7 (Scheduling of Deliveries).
10.2 No partnership, joint enterprise, agency or jointly owned property shall be
created by this Agreement, and each Party shall retain its property upon termination of
this Agreement.
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11.
NO WARRANTY AS TO WATER QUALITY
Neither Party guarantees the quality of water delivered, received, or used pursuant to this
Agreement. Each Party waives its right to make a claim against the other Party for the
effect on the quality of surface or underground water as a result of this Agreement, unless
such effect on water quality is the result of such other Party’s negligent or wrongful action
or inaction.
12.
DELIVERY OF WATER
12.1 Chandler Water furnished to NMID pursuant to this Agreement shall be delivered
to NMID at such delivery point(s) that have been approved by NMID and CAWCD.
12.2 All Chandler Water delivered to NMID from the CAP system shall be measured
with equipment furnished, operated, and maintained by CAWCD. Upon the request of
NMID or Chandler the accuracy of such measurements shall be investigated by CAWCD
and NMID and any errors which are mutually determined to have occurred therein shall
be adjusted. However, in the event that CAWCD and NMID cannot agree on the required
adjustment, CAWCD’s determination shall be controlling.
12.3 It is agreed by the Parties that deliveries of CAP water scheduled under this
Agreement are subject to temporary interruption due to investigation, inspection,
construction, testing, maintenance, repair or replacement of the CAP water delivery
facilities. Further, the Parties agree that deliveries of CAP water scheduled under this
Agreement are subject to temporary interruption by CAWCD due to insufficient water
supplies or delivery capacity needed to deliver waters throughout the CAP system.
13.
BOOKS AND RECORDS
NMID shall establish and maintain accounts and other books and records pertaining to
the administration of the terms and conditions of this Agreement including NMID’s water
supply and water use data. Reports thereon shall be timely furnished upon request.
Subject to applicable federal and state laws and regulations, each Party to this Agreement
shall have the right during office hours to examine and make copies of each other Party’s
books and records relating to matters covered by this Agreement.
14.
AUTHORIZED REPRESENTATIVES; NOTICES.
14.1 The individuals named below are authorized and directed to act as the
designated representatives for the respective Parties and shall serve as a primary contact
person for such Party.
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If to City of Chandler:
Simone Kjolsrud, Water Resources Manager
City of Chandler
Mail Stop 905 | P.O. Box 4008
Chandler, AZ 85244-4008
(480) 782-3663
If to NMID:
Shelton Van Allen, Manager
New Magma Irrigation & Drainage District
34360 North Schnepf Road
Queen Creek, AZ 85242
(602) 987-3461
14.2 Any notice, demand, or request authorized or required by this Agreement
shall be in writing and shall be deemed to have been duly given if mailed, via certified
mail, return receipt requested, or personally delivered to the authorized representatives
set forth above. The designation of the addressee or the address may be changed by
notice given in the same manner as provided for in this Section.
14.3 Without limiting the generality of the duties and authorities of the authorized
representatives to take such action as reasonably necessary to effectuate this
Agreement, the authorized representatives are hereby specifically authorized and
directed to approve the water account and adjustments of accounts which may be
necessary to implement this Agreement.
14.4 The authorized representatives may be replaced at the will of the Party
they represent and such replacements shall be effective when written notice of
replacement is received by the other Party. Neither of the representatives shall have
authority to amend the Agreement. Agreements of the authorized representatives in the
performance of their duties under this Agreement shall be in writing and signed by them.
The authorized representatives may delegate all or a portion of its duties under this
Agreement, provided such delegation must be in writing and delivered to the other Party
to be effective and may be revoked at any time by the authorized representative or the
governing body of the Party by providing written notice thereof.
15.
ASSIGNMENT
The provisions of this Agreement shall apply to and bind the successors and assigns of
the Parties hereto, but no assignment or transfer of this Agreement or any interest
therein shall be valid unless and until approved in writing by both Parties.
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Notwithstanding the foregoing City of Chandler may assign its annual and Long-Term
Storage Credits.
16.
INSURANCE
16.1
During the term of this Agreement, unless otherwise agreed in writing by
Chandler, NMID will procure and maintain in force the following types of insurance:
16.1.1
Commercial General Liability
Commercial General Liability naming Chandler as an additional insured, including
bodily injury, personal injury, property damage, wrongful death and contractual
liability with a minimum limit of $1,000,000 per occurrence, $3,000,000 aggregate.
If any Excess insurance is utilized to fulfill the requirements of this paragraph, the
Excess insurance must be “follow form” equal or broader in coverage scope than
underlying insurance.
16.1.2 Automobile Liability-Any Auto or Owned, Hired and Non-Owned Vehicles
NMID must maintain Business/Automobile Liability insurance with a minimum
limit of $1,000,000 each accident. If any Excess or Umbrella insurance is utilized
to fulfill the requirements of this paragraph, the Excess or Umbrella insurance
must be “follow form” equal or broader in coverage scope than underlying
insurance.
16.1.3
Worker’s Compensation
NMID must maintain Workers Compensation insurance to cover obligations
imposed by Arizona State law and must also maintain Employers’ Liability
insurance of not less than $1,000,000 for each accident and $1,000,000 disease
for each employee.
16.1.4 Commercial Umbrella – combined single limit of $4,000,000
16.2
Any insurance carried by Chandler shall be excess of and not contributory
insurance to any insurance afforded hereunder. NMID will submit satisfactory proof of
insurance to Chandler.
16.3
With Chandler’s written approval, NMID may self-insure or combine the
coverages required by this Agreement with coverages outside the scope of that required
by this Agreement.
17.
INDEMNIFICATION
17.1 Each Party (indemnitor) to this Agreement shall indemnify and hold
harmless the other Party (indemnitee) and its governing bodies, agents, directors,
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officers, and employees from any loss, damage, or liability, including reasonable
attorney’s fees, caused by negligent or wrongful action or inaction on the part of the
indemnitor and its governing bodies, agents, directors, officers, and employees,
including without limitation, claims for bodily injury, illness, death, or damage to
property. Each Party shall assume liability for its own negligent or wrongful action or
inaction.
17.2 NMID shall hold Chandler harmless on account of damage or claim of
damage of any nature whatsoever for which there is legal responsibility, including
property damages, personal injuries, or death arising out of or connected with the
control, carriage, handling, use, disposal, or distribution of water by NMID beyond
NMID’s CAP delivery point. Chandler shall not be liable for any action taken by
CAWCD or NMID regarding the construction, operation, or maintenance of connection
facilities necessary to effectuate this Agreement.
17.3
In the event of a third-party action against NMID or Chandler for claims
arising from the activities that are the subject of this Agreement, the Parties will meet to
determine procurement of legal counsel and the appropriate defense against the action.
18.
UNCONTROLLED FORCES
Neither Party shall be considered to be in default in the performance of any of its
obligations hereunder when a failure of performance shall be due to uncontrollable
forces. The term “uncontrollable forces” shall mean any cause beyond the control of the
Party unable to perform such obligation, including but not limited to, failure of or threat
of failure of facilities, flood, earthquake, storm, fire, lightning, and other natural;
catastrophes, epidemic, war, riot, civil disturbance, or disobedience, strike, labor
dispute, labor or material shortage, sabotage, government priorities and restraint by a
court order or a public authority, an action or non-action by, or failure to obtain the
necessary authorities or approval form, any governmental agency or authority, which by
exercise of due diligence such Party could not reasonably have been expected to avoid
and which by exercise of due diligence it shall be unable to overcome. Nothing
contained herein shall be constructed to require either Party to settle any strike or labor
dispute in which it is involved.
19. NO THIRD-PARTY BENEFICIARIES
This Agreement is solely for the benefit of the Parties and does not create nor shall it be
construed to create rights in any third party. No third party may enforce the terms and
conditions of this Agreement.
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20. ENTIRE AGREEMENT
The terms, covenants and conditions of this Agreement constitute the entire Agreement
between the Parties with regard to the subject matter which is specifically mentioned
and no understandings or obligations not herein expressly set forth shall be binding
upon them.
This Agreement may not be modified or amended in any manner unless in writing,
signed by the Parties and duly authorized or delegated by the Party’s governing body.
21.
WAIVER
The waiver by either Party for a breach of any term, covenant or condition in this
Agreement shall not be deemed a waiver of any other term, covenant or condition or
any subsequent breach of the same or any other term, covenant or condition of this
Agreement.
22.
SIGNATURE CLAUSE
The signatories hereto represent they have been appropriately authorized to enter into
this Groundwater Savings Facility Storage Agreement on behalf of the Party for whom
they sign and that no further action or approvals are necessary before execution of this
Agreement.
IN WITNESS WHEREOF, this Agreement is executed by the Parties hereto, pursuant to
authorization of their respective governing bodies, to be effective as set forth herein.
NEW MAGMA IRRIGATION &
DRAINAGE DISTRICT,
An Arizona political subdivision
Attest:
By:
Name:
Its:
Secretary
By:
Name:
Title:
President
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APPROVED AS TO FORM AND WITHIN THE POWER AND AUTHORITY GRANTED
UNDER THE LAWS OF THE STATE OF ARIZONA TO THE NEW MAGMA IRRIGATION
& DRAINAGE DISTRICT:
By:
Name:
Title: Attorney for NMID
CITY OF CHANDLER, an Arizona municipal
corporation
_______________________________
Kevin Hartke, Mayor
Date: ________________________________
Attest: _______________________
Chandler City Clerk
APPROVAL OF THE CHANDLER CITY ATTORNEY
In accordance with A.R.S. Section 11-952, the foregoing Intergovernmental
Agreement has been reviewed by the undersigned counsel who has determined that it
is in proper form and within the power and authority granted to the City of Chandler
under the laws of the State of Arizona.
Dated this _________________ day of __________________, 2023
__________________________________________
Kelly Y. Schwab
Chandler City Attorney