HomeMy WebLinkAbout1979 Ordinance No. 026. .
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BY AUTHORITY
ORDINANCE NO. 26
---SERIES OF 1 979
COUNCIL BILL NO. 28
INTRODUCED BY
COUNCILMAN MANN
AN ORDINA NCE APPROVING AN AGREEMENT TO STUDY METHODS TO UTILIZE
CITY OF ENGLEWOOD EXCESS RAW WATER BY MISSION VIEJO ANO APPROVE
THE GRANTIN G OF AN OPTION TO PURCHASE CITY OF ENGLEWOOD EXCESS
RAW WATER BY MISSION VIEJO COMPANY.
WH EREAS, by Agreement of October 21, 1978, the City of .
Englewood (E ngle wood) and Mission Viejo Company (Company) have
jointly s t u died and analyzed Englewood water rights; and
WH EREAS, the result of said study indicates that Englewood
h as a substantial surplus of raw water in excess of Englewood's
water requi rements; and
WHE REAS, Section 124, Article XIII, of the Englewood Home
Rule Charte r provides:
"Council shall have the power to enter into
contracts for sale of water or water services,
both in and outside the city, whenever it
determines that the water supply available
exceeds that necessary for the present needs
of the inhabitants of the City, said contracts
for water and water services, to be subject
to the present and future needs and require-
ments of the City and its inhabitants.
NOW , T HEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF ENGL EWOOD, COLORADO, as follows:
S ection 1 .
A . T hat the City of Englewood shall enter into an agreement,
marked Ex hi bit 1, which provides as follows:
(1 ) Th a t a letter agreement of October 31, 1978, attached
hereto and incorporated herein by reference, marked Exhibit B,
between Eng lewood and Company is hereby ratified and approved, said
agreement p roviding generally as follows:
(a) Engineers for Englewood and Company shall
conduct a Phas e I study to d ete rmine the quantity, utility and
value of Engl e wood excess raw water, which study has been completed
and reviewed .
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• (b) Upon election of Englewood or Company, a
Phase II report may be reques ted , which report shall include
p r o visions for ascertaining the value of Englewood's excess water
and utilization of excess raw water by Company.
(c) That Englewood shall not offer for sale,
lease or exchange any of its excess raw water for a period of
e ighteen (18) months after completion of the Phase II study,
a l thoug h nothing in said October 31, 1978 agreement shall pre-
v nt Englewood from entering into short-term leases not exceeding
one year.
(d) Should Englewood receive a bona fide offer
for sale, lease or exchange of Englewood water which it desires
to accept, Englewood shall notify Company, and Company shall
have the first right to purchase said water under the same terms and
conditions during the fifteen (15) months after notification by
Englewood or the expiration of eighteen (18) months after com-
pletion of Phase II, whichever is first.
B. That Company agrees to pay Englewood One Hundred Thousand
Dollars ($100,000), up to .Fifty Thousand Dollars($50,000) of which is
to be used for completion of Phase II study described in the
October 31, 1978 letter. Fifty Thousand Dollars ($50,000) shall
be consideration for Englewood granting to Company the exclusive
right and option to lease, within eighteen (18) months after
completion of Phase II study, excess water described in Camp,
Dresser and McKee report dated February 28, 1979, acknowledged to
be at least 5,000 acre feet per year.
Sununary of said Camp, Dresser and McKee report is that
Englewood has enough raw water to supply a population of 50,000,
60,000 or 70,000 with an excess yield of approximately 6,300 -
14,600, 5,000 -13,200 and 3,600 -11,900 acre feet per year,
respectively, during a drought period.
C. Englewood , after consulting with Company, shall select
an engineering consulting firm or firms to proceed with Phase II,
whic h study shall be completed not later than November 2, 1979.
o. That Phase II study shall include a summary of water
r e qu i rements, description of existing facilities, identification
o f water sources, Englewood and Highlands Ranch demands through
Union Avenue intake, alternative operations and facilities,
e valuation of alternatives from a standpoint of economics, bene-
fits and risk factor and an opinion of legal attainability.
E. Phase II shall also include an analysis of the institu-
t iona l arrangements to provide for a lease agreement between the
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parties f or an initial twenty-(20) year period with additional
renewal fo r three (3) successive twenty-(20) year periods and
p ym nt of fair and eq ui t a b l e l ease payments and other financing
a r rangements .
F. Eng l e wood and Compan y understand that Englewood's excess
water rights are principally direct flow rights and are seasonably
variable, b ut at the discretion of Englewood, the direct flow
rights may b e supplemented from other rights to assure Company of
a minimum of 5 ,0 00 acre feet annually, subject to present and
future needs a n d requirements of Englewood and its inhabitants.
G. Should Company fail to exercise its option to purchase
Highlands Ra nch, or Denver Water Board, directly or througn its
distributors , elects to serve Company Highland Ranch with water,
the Fifty Thousand Dollars ($50,000) paid by Company as earnest
money for option t o lease, s hal l be refunded to Company and all
further obligations of the parties to each other terminated.
Englewood sha ll retain the sums necessary to pay for Phase I study
and to satisfy all obligations incurred up to Fifty Thousand
Dollars ($50 ,000) as a result of undertaking Phase II study.
Section 2.
The City Council of the City of Englewood, Colorado, hereby
authorizes t he Mayor of the City of Englewood and the Director of
Finance, ex off i c i o City Clerk-Treasurer, to sign and attest an
agreement be tween the City of Englewood, Colorado, and Mission
Viejo Comp any, marked Exhibit 1, attached hereto and incorporated
by reference .
Introdu ced , r e ad in f ul l and passed on first reading on the
4th day of Jun e ,1979.
Published as a Bill for a n Ordinance on the 6th day of
June , 1979.
Read by ti t le and passed on fi na l .reading on the 18th day
of June, 1979 .
Published by title
on the 20th day of J u ne ,
Attest:
26 , Series of 1979, ---
I , William D. James, do hereby certify that the above
and foregoi ng is a true, accurate and complete copy of the
Ordinance p assed on final reading and published by title as
Or dinance No. 26 , Series of 1979.
~asurer
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MISSION VIE;JO
COMPANY
May 22', 1979
c ·ty of Englewood
3400 South El ati Stree t
Englewood, Colorado 80110
Gentlemen:
Exhibit 1
By letter agreement dated October 31, 1978, Mission Viejo Company
(Company), and the City of Eng lewood (Englewood) jointly com-
mi tted to the study and analysis of Englewood water rights in
excess of its wa t er requirements which might be available for
utilization at t he Highlands Ranch in Douglas county, Colorado.
The October 31, 1 9 78 , l e tter agr e ement contemplated a two phase
analysis of Engl ewood wat e r r i ghts and requirements, the first
phase of which was t o determine the excess water available to and
owned by Englewood, if any, and the second phase of which was to
determine methods for utilization of any excess water by Mission
Viejo Company at the Highlands Ranch •
The first phase s t udy has been completed by Camp, Dresser &
McKee, Inc ., a s evidenced -by a report dated February 28, 1979,
entitled "Estimati on of Yield of Water Rights". A copy of the
report is attached hereto as Exhibit A, and incorporated herein
by reference, a nd Englewood and Company acknowledge that the
report has been completed in accordance with the provisions of the
October 31, 197 8, le tter agreement.
The report indicates that Englewood has a substantial surplus of
water rights i n excess of its water requirements which may be
utilized by Mis sion Viejo Company in its development of H~ghlands
Ranch. Therefore, Englewood and Company wish to procee~ to the
second phase study. Accordingly:
1) Englewood a nd Company · ratify and reconfirm the October 31,
1978, letter agreement, and ackno wledge that its provisions con-
tinue to be binding and en forceable upon the parties, except as
expressly modif ied herein.
2 ) co~pany ierewi t h a gree s to pay to Englewood One Hundred Thou-
sand Dollars ($1 00,000 .0 0 ), n ot to e xceed Fifty Thousand Dollars
($50,000.00) o f which shall be paid as bills are incurred by
Englewood for comp let ion of the p hase two study as defined and
7400 SOUTH ALTON· ENGLEWOOD· COL ORADO 80110 · 303/770 -7750
• City of Eng lewood
May 22, 197 9
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described i n the October 31, 1978, letter agreement and as
further re fined and specified in Exhibit B attached hereto and
incorporated by reference. The balance of Fifty Thousand Dollars
($50,000.00) tendered herewith shall constitute additional con-
sideration f or the exclusive right and option of Company to lease,
within eighteen (18) months of completion of the phase two study,
excess Englewood water described in the phase one Camp, Dresser
& McKee report (Exhibit A) , acknowledged by Englewood and Company
to be at least 5,000 acre feet per year.
3) Englewood sha l l authorize an engineering consulting firm or
firms, selected by E nglewood a f ter consultation with Company, to
proceed promptly with the phase two study, as described in Exhibit
B, which shall be completed no t later than November 2, 1979.
4) Englewoo d and Company agree that the phase two study shall
also include analysis of institution al arrangements to provide a
framework for a binding lease contract of twenty (20) years with
additional r enewa l options for three successive twenty (20) year
periods vested in the lessee, and the payment of fair and equitable
lea se payments, and other financing arrangements, for excess water
of Englewood t o be used by c ompany. Englewood and Company shall
mutually agree on the institutional arrangements and the amount of
lease payments, a n d other fin a ncing arrangements, for the use of
e x cess Englewood water by Company.
5) Englewood and Company understand and acknowledge that the phase
two study wil l proceed on the premise that the Englewood surplus
water rights are principally d i rect flow water rights. Yields from
these rights a r e s e asonably variable, and depend upon the availa-
bility and quantity of stream f lows. At the discretion of
Englewood, the yield from t r ans-mountain or trans-basin water
rights may be supplied to supp l ement the yield from direct flow
river rights to assure Co mpany a minimum of 5,000 acre feet of
water annual ly.
6) Incorpora ted in t h e phase t wo study reports shall be legal
opinions from Rapha e l J~ Moses (Company's water attorney) and
James o. Geissi ng e r (Englewood 's water attorney) concerning the
legal attain a b ility of the alternatives identified in the phase
two study.
7) If Company , its s u c c essors, transferees and assigns, shall
fail to exerc i se the op t ion to acqui r e the Highlands R~nch, or if
the Denver Wa t e r Bo ard shall assert the right to serve water to
the Highlands Ranch directly, or through one of its distributors,
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City of Englewood
ay 22, 197 9
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the Fifty Tho usand Dollars ($5 0 ,000.00) paid by Company as earnest
money for the exclusive right and option to lease shall be
refunded and this agreemen t an d the October 31, 1978 agreement
are terminat ed; otherwis e , En glewood shall retain such funds as
consideration for the exclusive right and option of Company to
lease the su rplus water described in the phase one report, under
a lease agreement cons i stent wi th the provisions of this letter
agreement.
If the fo r e going conforms with your understanding, would you p l ease
s o indicate by · executing the attached copy of this letter in the
appropriate pl aces.
Very
PJR :lc
APPROVED AND AC CEP TE D: •• • ••
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ATTEST:
City Clerk
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APPROVED:
Director o f Utilities
Ci t y Attorney
October 31, 1978
City of Englewood
3400 South Elati Street
Englewood , Colorado 80110
Gentlemen :
EXHIBIT B ·
From time to time, discussions have been held between
representatives of the City of Englewood (Englewood) and
Mission Viejo Company (Company) concerning water owned by
Englewood which might be utilized to provide water at the
Highl ands Ranch in Douglas County, Colorado.
As you know, Company is developing a plan for a satellite
conununity at the Highlands Ranch, a component part of which
is a water supply and distribution system.
The purpose of this letter is to clarify and confirm a
process by which water owned .or controlled by Englewood may
be analyzed by ahe engineers for Englewood and company to
determi ne the quanti~y of excess water available from Englewood,
if any, and methods by which tQe water can be delivered for
use on the Highlands Ranch.
Englewood has provided Company a copy of a study entitled
"Compr ehensive Water Rights Study" prepared by Blatchley and
Associates, for CH2M Hill, Inc. and transmitted to Englewood on
October 31, 1975.
The water made the subject of this letter agreement are
the yields from the water rights described in Appendix C of
the Blatchley-CH2M Hill study, su~ect oJl!Y._to existing long
term leases executed by EJl2lewood, .. ~· -·-··-----·-· -· .. ---wt ....,. swwwl
The Blatchley-CH2M Hill Study contains the following con-
clusion:
"the City of Englewood has surplus water rights
that .could be leased, sold or become part of a regional
service authority, with an appropriate reimbursement
for the capital investment of Englewood".
Englewood and Company estimate that the quantity of surplus
water owned by Englewood ranges .from a minimwn of 5,000 acre
feet to 10,000 acre feet or more.
7400 SOUTH ALTON • ENGLEWOOD • COLORADO 80110 • 303/770-7750
Ci ty of Englewood
October 31, 1978
P age 2
Englewood and Company intend to ascertain the quantity,
u tility, and value of any surplus water as follows:
l. Camp, Dresser and McKee, Inc, (.engineers for Englewood)
and Jack G. Raub Company (engineers for Company) have
agreed upon a scope of work to be performed under the
direction of Camp, Dresser and McKee, Inc. The scope of
work for Phase I -Investigation is attached hereto as
an exhibit, and incorporated herein. The tasks required
by sections I and II of the scope of work shall be performed
by zorick-Erker Engineering, Inc. with assistance as
appropriate from Ronald K. Blatchley and David N, Church,
the engineers responsible for preparation of the Blatchley~
CH2M Hill Report. The tasks required .by Sections III,
IV and V of the scope of work shall be performed by Camp,
Dresser and McKee, Inc., and within sixty (60) days fr9m
the date of this letter agreement, a preliminary report
shall be completed by Camp, Dresser and McKee, Inc,, in-
corporating the findings of Zorick-Erker Engineers, Inc.
and submitted to Jack G. Raub Company for review and
analysis. Upon request of City or Company the time of
completion described above may be extended thirty (30) days.
2. Camp, Dresser and McKee, Inc., (for Englewood) and
Jack G. Raub Company (for Company) shall review the report
and conciliate any differences which may arise concerning
the objective of producing, within ninety (90) days from
the date of this letter-agreement, a final report upon
which both engineering consultants have agreed. If Camp,
Dresser and McKee, Inc •. and Jack G. Raub company cannot
agree, the report shall be completed by Camp, Dresser and
McKee, Inc., with ar e as of disagreement noted in a special
appendix to the ~eport.
3. Upon completion of the report, copies shall be provided
t o Englewood and Company for review and analysis. For a
period of sixty (60) days after receipt of the completed
report, either Englewood or Company may ei~.t to request
, th~ . .9.t ber._tg. JlQd_$~-~-h!,. .. ~_<;;.9.fl.9 . ..e!'i-~-~ e_ .. ~lµQX7-d"es-~_r£.o§,
by way of example, in tne document entitled, 'Phase 2
Inv estig ation-Facili t y Analysis," attached to this letter
agreemen t. Both Englewood and Company conunit and pledge in
good faith to negot i ate with each other concerning the
conduct of the second phase study,. and concernir.g the
execution of appropriate contractual documents
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City of Englewood
October 31, 1978
Pag e 3
for completion of the work, The contr~ct tor the second
ph~se of the study shall include provisions for ascer-
taining the value of Englewood's excess water based on
alternate concepts for storage, diversio~, and treatment,
as well as procedures for exclusive utilization of such
water rights by Company. By negotiation and agreeme n t,
Englewood and Company may enlarge or modify the scope of
the study to include matters not described her ein or in
the at tach ed exhibits.
4. Englewood and Company acknowledge that until the
first "phase repor t is completed, it would be premature
to negotiate the exa ct provisions of the contract for
phase two; however, Englewood and Company agree that the
essence of this agreement is to provide Englewood and
Company a procedure for formalization of a contract when
further data is available. Accordingly, Englewood and
Company each pledge to the other the highest standard of
good faith in their negotiations.
5. The cost of the first phase of the study is estimated
to be the aggregate amount of $30,000.00. Company agrees
to pay all of such costs: approximately $4,000.00
directly to zorick-Erker, Engineering, Inc.; approximately
$4,500.00 to Jack .G. Raub Company; and approximately
$21,500.00 to Englewood for payment to Camp, Dresser and
McKee, Inc., Blatchley Associates, Inc. and James D.
Geissinger, attorney. In consideration thereof, Englewood
agrees it shall not offer for sale, lease or exchange,
nor in fact sell, lease or exchange any of its water,
until three (3) months following con~letion of the fir st
phase study, or, if undertaken, until eighteen (18) months
following completion of the second phase study, except
that short term leases not exceeding one year may be
executed t6 assure utili zation of Englewood's wat er during
the study periods :
If, duri ng the periods when Englewood shall make no sale,
lease or exchange, as aforesaid, Englewood shall receive
any bona fide offer for the sale, lease, or exchange of
its water which i t wishes to accept , it shall advise
company, and un il fi fteen (15) months from the date of
such noti&icatj.on, or until eighteen (18) months following
the cokpletion of the second phase study, whichever shall
first occur , c o mp any shall have the first option to pur-
chase, lease o r e x hange such water, upon the same te r ms
and condi t ion s of f er ed Englewood.
City of Englewood
October 31, 1978
Page 4
If the foregoing conforms to your understandings, would
you please so indicate by executing a copy of this letter
agreement in the appropriate places.
PJR: le
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APPROVED AND ACCEPTED
CITY OF ENGLEWOOD
ATTEST:.:._~~~~~~ ~S:;~~~~~=====---~~·
November 6 DATE=----~-~-~~-~-' 1978
V'{J~ APP ROVED : ~ --o-.i_r_e_c_t_,o._r~o-f+-U-t ..... i~l.,..i-t..;;;1=e-s--