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RESOLUTION NO. 5945 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHANDLER, ARIZONA, APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE A FOLLOW UP NOTICE OF ABANDONMENT TO THE GILA RIVER INDIAN COMMUNITY RELATED TO THE LONE BUTTE WASTEWATER TREATMENT PLANT AND RED TAIL HAWK HEALTH CENTER. WHEREAS, on December 16, 1981, the City of Chandler (“Chandler”) and the Gila River Indian Community (“Community”) entered an agreement to lease (“Lease”) the Lone Butte Wastewater Treatment Plant (“Lone Butte”) for ten-year terms; and WHEREAS, on September 20, 2010, Chandler and the Community entered an agreement to extend utility service to the Red Tail Hawk Health Center (“Health Center”) and which affects Lone Butte operation; and WHEREAS, on February 11, 2022, Chandler sent notice to the Community under the Lease of Chandler’s intention to abandon Lone Butte operation; and WHEREAS, Chandler seeks to open a dialog and work with the Community to ensure a smooth transfer or possible extension of Lone Butte operation and to better understand any potential impacts on the Health Center. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chandler, Arizona, as follows: Section 1. Hereby approves the Follow Up to Chandler’s Notice of Abandonment (“Follow Up Notice”) substantially in the form attached as Exhibit “A.” Section 2. Authorizes the Mayor to execute the Follow Up Notice and such other documents as necessary to effectuate this resolution on behalf of the City of Chandler. PASSED AND ADOPTED by the City Council of the City of Chandler, Arizona this _____ day of October, 2025. ATTEST: _______________________________ ________________________________ CITY CLERK MAYOR Resolution 5945 Page 2 CERTIFICATION I HEREBY CERTIFY that the above and foregoing Resolution No. 5945 was duly passed and adopted by the City Council of the City of Chandler, Arizona, at a regular meeting held on the ____ day of October, 2025 and that a quorum was present thereat. _______________________________ CITY CLERK APPROVED AS TO FORM: _______________________________ CITY ATTORNEY Exhibit “A” September 9, 2025 SENT VIA CERTIFIED FIRST CLASS US MAIL/RETURN RECEIPT REQUESTED The Honorable Governor Stephen Roe Lewis Governor of the Gila River Indian Community Post Office Box 97 Sacaton, Arizona 85147 Mrs. Rachael Larson Superintendent - Pima Agency Post Office Box 8 Sacaton, Arizona 85147 Subject: Follow Up to City of Chandler (Chandler) Notice of Abandonment dated February 11, 2022, and Request for Discussion with the Gila River Indian Community (Community) Related to the Lone Butte Water Treatment Plant (Lone Butte) and Red Tail Hawk Health Center (Health Center) Dear Governor Lewis, and Mrs. Larson: With this letter, Chandler seeks to follow up on Chandler’s proposed abandonment of the Lone Butte operation (effective July 19, 2027) and to begin an open and collaborative dialogue with the Community to facilitate the transfer of the Lone Butte operation and to discuss how the transfer of the Lone Butte operation affects, if any, the Health Center. Our goal is to work together to ensure a smooth transfer of the Lone Butte operation and to better understand any potential impacts on the Health Center. To support this conversation, we have included a preliminary list of background information, discussion points, and suggested next steps. A. Factual Background 1. Lone Butte On December 16, 1981, the Community and Chandler entered an agreement to lease the Lone Butte facilities for ten-year terms. Among other terms and conditions under the lease, Chandler agreed to operate and maintain Lone Butte and reserve wastewater treatment capacity of at least 1.2 MGD for all Community users located on certain real property including the Pima-Chandler Industrial Park provided the Community users pay Chandler the same rates and fees charged to comparable customers within Chandler city limits. The lease was extended by the parties for an additional ten-year term that started July 19, 2017, which means the lease will expire July 19, 2027, a mere two years from now. On February 11, 2022, Chandler provided notice to the Community of Chandler’s intent to abandon or terminate the lease when the lease expires on July 19, 2027. Upon termination or abandonment of the lease all operations at Lone Butte and Lone Butte’s associated industrial pretreatment program will cease. This means the following, but not limited to, responsibilities and assets will revert to the Community: (i) the Lone Butte facility and all equipment; (ii) the entire industrial pretreatment program related to all permitted industrial users; and (iii) Chandler’s contribution of one-half of the salary for the Lone Butte operator will cease. 2. Health Center On September 20, 2010, the Community and Chandler entered an agreement to extend utility service to the Health Center. Under the Health Center agreement, Chandler agreed to provide sewer service to the Health Center provided the Community constructed certain infrastructure and waived Chandler’s obligation to reserve sewage treatment capacity of at least 1.2 MGD at Lone Butte in exchange for the maximum forecasted or actual amount of wastewater produced at the Health Center, whichever is more. The parties amended and restated the Health Center utility service agreement on April 5, 2017, to address additional construction of infrastructure and the use of Chandler public right of way for the infrastructure (Amended Agreement). Unless extended by the Community and Chandler, the initial term of the Amended Agreement expires on July 18, 2027, one day before the lease. B. Preliminary Discussion Points Based on the foregoing facts, Chandler submits the following preliminary list of discussion points. These discussion points are not comprehensive nor exclusive. Instead, Chandler lists these points for the Community’s review, consideration, and discussion to open a dialog to coordinate and cooperate regarding Lone Butte operation and Health Center sewer service. The discussion points are listed by each facility in no particular order. 1. Lone Butte Preliminary discussion points: (i) determine important transition thresholds and proposed schedule to meet thresholds; (ii) discuss the status of the Community’s new membrane wastewater facility and possible lease extension to allow continued operation of Lone Butte lagoon until the new facility is fully operational; and (iii) determine any potential Chandler involvement in the closure of the Lone Butte Lagoon facility. 2. Health Center Preliminary discussion points: (i) Upon termination or abandonment of the lease, if the Community wishes Chandler to continue to provide utility service or select another provider to provide service for the Health Center; (ii) if the parties wish to extend the Amended Agreement for an additional 5-year term. C. Proposed Next Steps Chandler seeks to resolve and facilitate the transfer of the Lone Butte facility, and if the Community wishes, continue to provide sewer utility services to the Health Center. To this end, if the Community agrees, please deliver written notice of the Community’s agreement to the undersigned along with a list of people who will represent the Community in these discussions and three dates and times these representatives are available to begin the parties’ discussion. My office will contact these representatives and schedule a meeting at the respective parties’ earliest convenience. Please do not hesitate to contact me if you have any questions or require additional information. Respectfully, Kevin Hartke Mayor of Chandler, Arizona Copies to: Ron Grittman, GRIC Public Works Director Gila River Indian Community Post Office Box G Sacaton, Arizona 85147 Barney Enos Jr. Gila River Indian Community Post Office Box 97 Sacaton, Arizona 85147 email: barney.enos.jr.ceot@gric.nsn.us John M. Martin Pima Leasing 5350 N. 48th Street, Suite 245 Chandler, AZ 85226 John.martin@theplfc.com CC via email to: John Pombier, Acting City Manager Kelly Schwab, City Attorney Dawn Lang, Deputy City Manager/CFO Jeremy Abbott, Acting Public Works & Utilities Director Jenny Winkler, Assistant City Attorney Bhavika Bhakta, Water Quality Manager Josef Kennis, Wastewater Facilities Manager Simone Kjolsrud, Water Resources Manager