Title
Intergovernmental Agreement with Arizona State Land Department for Allocation of Colorado River Water (Ordinance S-46889)
Description
Request to authorize the City Manager, or his designee, to enter into an Intergovernmental Agreement (IGA) between the City of Phoenix (Phoenix) and the Arizona State Land Department (ASLD) to receive Colorado River Water to serve the Biscuit Flat Land. Further request to authorize execution of amendments to the agreement, as necessary, within the City Council approved expenditure authority as provided below, and for the City Controller to disburse all funds related to this item, including but not limited to payments to the State of Arizona, ASLD, the Central Arizona Water Conservation District and various aquifer recharge partners. The total value of the agreement will not exceed $27 million.
Report
Summary
This IGA between Phoenix and the ASLD would facilitate revised General Plan land use designations, rezoning and water resources for the Biscuit Flat Land, an area of 12,000 acres of ASLD trust land within the City, located within an area generally bounded by Interstate-17 on the east, the Central Arizona Project Canal on the south, the City of Phoenix boundary on the west, and Carefree Highway/State Route 74 on the north (Biscuit Flat Land).
Both Phoenix and the State Land Trust will benefit from encouraging and ensuring responsible development of the Biscuit Flat Land. ASLD and Phoenix are currently working to imminently bring to state trust auction a parcel within an area of the Biscuit Flat Land consisting of roughly 3,500 acres and encompassing the land bounded by I-17 on the east, Loop 303 on the south, Deadman Wash on the west, and Carefree Highway/State Route 74 on the north (Package One). Phoenix would provide water and wastewater services for the property.
ASLD currently holds a Subcontract for Municipal & Industrial Priority Colorado River Water through the Central Arizona Water Conservation District for the benefit of its trust lands. As a part of the IGA, ASLD would recommend to the State Selection Board, which controls ASLD’s Colorado River Water, that 12,000 acre-feet of the ASLD Colorado River Water be transferred to Phoenix in a series of assignments if the First Phase of development happens with Package One for Biscuit Flat Land is approved.
ASLD, or a developer designated by ASLD, would be the applicant for rezoning of the Biscuit Flat Land. The rezoning would occur in two packages. The First Package would occur in the near future and the remainder of Biscuit Flat Land in Package Two would be planned and zoned at a later date. Under the agreement, Phoenix would not charge zoning application fees for rezoning. All the rezoning for Biscuit Flat Land will adhere to applicable North Black Canyon Corridor and Edge Treatment Design Guidelines. The parties will work cooperatively to apply the Guidelines within Biscuit Flat Land. Phoenix will reevaluate the existing open space designations within Biscuit Flat Land to potentially designate additional land for preservation or remove some existing land based upon future, more specific planning efforts. All of these General Plan and rezoning efforts require significant public outreach and public meetings through the required City Council appointed board or commission prior to City Council action. Nothing in the IGA commits the Phoenix City Council to approve any of the general plan or rezoning applications presented to it.
Phoenix will provide credits for any Water Resource Acquisition Fee to development of the Biscuit Flat Land, up to the volume of ASLD Colorado River Water assigned and allocated to Phoenix.
Following assignment and allocation of ASLD Colorado River Water to Phoenix, Phoenix commits to provide water service to all State Trust Land within Phoenix City boundaries in the same manner and upon the same terms as provided to all other land within Phoenix.
In addition, ASLD and Phoenix will cooperate on the storage of ASLD Colorado River Water for four years. Phoenix will use its Phoenix Aquifer Storage & Recovery Project (approximately 3,500 to 10,000 acre-feet per year) for storage of ASLD Colorado River Water. Phoenix also would attempt to assist ASLD in finding available storage capacity for additional storage of ASLD Colorado River Water during the four years elsewhere in the Phoenix area. The parties will share the costs of the Colorado River Water that is stored. In allocating storage credits earned by the storage, ASLD and Phoenix will each receive an amount of credits proportional to each entity's financial investment in creation of the storage credits.
Contract Term
The term of this IGA will begin on, or about, Sept. 1, 2020 and will end when the transfer of the 12,000 acre-feet is completed and associated storage credit development and exchanges have been finalized but no later than Sept. 1, 2032.
Financial Impact
Phoenix must, pursuant to section 37-106.01(C) of the Arizona Revised Statutes, reimburse ASLD, on a pro rata basis, for all costs and charges, including capital costs, interest and administrative expenses, incurred by ASLD for the 12,000 acre-feet that is to be transferred, as of the effective date of the amendment of the ASLD Subcontract. If ASLD elects to store some of its Colorado River Water in Phoenix-area recharge facilities, Phoenix would receive up to 36,000 acre-feet of long-term storage credits. Fees for these activities will not exceed $27 million.
Funding is available in the Water Services Department’s Capital Improvement Program budget.
Location
12,000 acres of ASLD trust land within the City, located within an area generally bounded by Interstate-17 on the east, the Central Arizona Project Canal on the south, the City of Phoenix boundary on the west, and Carefree Highway/State Route 74 on the north.
Council District: 1
Department
Responsible Department
This item is submitted by Deputy City Managers Karen Peters and Mario Paniagua, and the Water Services and Planning and Development departments.