Title
Request Authorization to Enter Into a Development Agreement with TSMC Arizona Corporation to Construct Wastewater Facilities (Ordinance S-52899) - District 1
Description
Request to authorize the City Manager, or his designee, to enter into a development agreement (DA) with TSMC Arizona Corporation (TSMC) for construction and installation of wastewater conveyance infrastructure facilities and increase the amount of wastewater conveyed into the public collection system.
Report
Summary
The City and TSMC will enter into a DA to construct and install wastewater conveyance infrastructure facilities as part of the improvements to support semiconductor fabrication plants (FABs), including improvements to two existing lift stations, new force main, and new gravity sewer lines. This will provide additional wastewater capacity to TSMC for up to three FABs. At which time, TSMC will need to complete their first industrial reclaimed water plant (IRWP) prior to conveying any additional wastewater flows to the City. Additionally, TSMC will be required to complete additional IRWPs within one year of every third FAB building receiving a Certificate of Occupancy and manufacturing semiconductor chips.
TSMC is responsible for all costs associated with the project and constructing all of the improvements. These improvements are necessary for the operation of TSMC semiconductor FABs and provide an interim wastewater solution that accommodates TSMC's rapid construction schedule. These improvements are in addition to the wastewater improvements identified in the existing DA, Contract 154048-0, effective on March 31, 2021, and along with their IRWPs meet their interim wastewater service demands until the North Gateway Wastewater Reclamation Plant (NGWRP) is operational. The City expects that TSMC will invest in additional wastewater system capacity expanding improvements to effectuate this agreement.
At the completion of these improvements, the City agrees to accept an increase in wastewater flow from approximately 333,000 to 755,000 gallons per hour from TSMC facilities into the City's public collection system for the duration of the contract term.
Contract Term
The contract term will expire upon the last of the following to occur:
- Twelve years after the effective date;
- Or one year after the date of completion of all IRWPs associated with FAB construction.
Additionally, the contract term will expire immediately in the event the initial IRWP is not operational by June 30, 2028, or if a new FAB has not been diligently pursued within three years after the last FAB has received a Certificate of Occupancy and manufacturing semiconductor microchips (subject to the initial 12-year period).
Financial Impact
There is no significant financial impact to the City.
Concurrence/Previous Council Action
The City Council approved a DA with Taiwan Semiconductor Manufacturing Company (TSMC) (Ordinance S-47129) on November 18, 2020.
Location
TSMC Arizona Corporation, 5088 W. Innovation Circle
Council District: 1
Department
Responsible Department
This item is submitted by Assistant City Manager Ginger Spencer, Deputy City Manager Alan Stephenson and the Water Services Department.