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HomeMy WebLinkAbout~Master - Agreement with Xenia for water service territory at 3535 South 530th Avenue RESOLUTION NO. 15-595 RESOLUTION APPROVING WATER SERVICE AGREEMENT WITH XENIA RURAL WATER DISTRICT CONFIRMING WATER SERVICE TERRITORY FOR 3535 SOUTH 530 AVENUE FOR THE CITY OF AMES WHEREAS, when annexation occurs in water service territory controlled by Xenia Rural Water District,three separate agreements have previously been consummated to confirm the territory transfer to the City; and, WHEREAS, first,the City requires the developer to accept any financial responsibility for buying out Xenia's service territory; second,Xenia requires the developer to agree to pay a certain amount for the service territory buy-out; and, third, Xenia and the City then confirm the territory transfer by written agreement; and, WHEREAS,this last step provides written documentation of the territory transfer,and also allows Xenia to comply with state law by legally transferring the obligation to provide water service to that area; and, WHEREAS, the property covered by this agreement is addressed as 3535 S. 530th Avenue and is owned by Hunziker Development Company LLC.,and the City Council approved annexation of 20.26 gross acres of land on July 14, 2015,with the property owner's agreement to covering any cost of a rural water service buyout, if it was necessary; and, WHEREAS,the developer subsequently negotiated a separate buyout agreement with Xenia Rural Water District; and, WHEREAS,City staffpreviously prepared comprehensive documentation ofXenia's service territory requests within the southern portion of the City; and, WHEREAS,on March 10, 1999,Xenia requested the right to serve a large area of land south of the City, and the maps presented showed Xenia's proposed territory stopping approximately one quarter mile south of the City's then southern border; and, WHEREAS, prior to the City Council's action to approve the request, the state-mandated 180-day review period expired, meaning Xenia's request was automatically approved; and, WHEREAS, a report from City staff indicated City staff was aware that Xenia planned to submit a revised map by October of that year to request extending its territory further north to the City's corporate limits; and, WHEREAS, such a request would have included the balance of this new development; however, neither the City nor Xenia has any record that any follow-up documentation was ever submitted; and, WHEREAS, on July 23,2002,the City Council reviewed a request from Xenia to serve the Reyes property, and that request was denied by the City Council, meaning that Xenia did not have the right to serve that property; and, WHEREAS, even though the Reyes' ultimately decided to drill a well to meet their water needs, City staff has consistently represented the City's position that Xenia has never had a right to serve this new development,and unfortunately,when developers such as the ISU Research Park and Hunziker have raised this issue with Xenia,Xenia has continued to maintain that Xenia"has or may have rights"to serve that land; and, WHEREAS,faced with the uncertainty which those claims bring both the Research Park and now Hunziker have agreed to buy out Xenia's claims in order to proceed expeditiously with their projects; and, WHEREAS, City staff feels there is limited value entering into an agreement for a release of service territory rights that Xenia cannot prove it actually possesses,however,Xenia is unwilling to sign its agreement with Hunziker unless the City Council approves this territory transfer agreement; and, WHEREAS, to refuse may put Hunziker and the City at risk of a Xenia lawsuit when after the development occurs and the City provides water service; and, WHEREAS, previous drafts of this agreement prepared by Xenia's attorneys included language stating that "good faith uncertainty exists" between the City and Xenia regarding this service territory; and, WHEREAS, staff made it clear that they cannot recommend that language to the Council, since Xenia has never produced any documentation that it ever received approval to serve this territory; and, WHEREAS, the final agreement thus states that"the parties disagree about whether Xenia has rights to serve this territory." NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa, that the Agreement with Xenia Rural Water District confirming that the City of Ames will provide water service to the recently annexed properties west of University Boulevard in south Ames is hereby approved. ADOPTED THIS 22nd day of September, 2015. c��"'R-LQ& A. Diane R. Voss, City Clerk Ann H. Campbell, Mayor Introduced by: Gartin Seconded by: Betcher Voting aye: Betcher, Corrieri, Gartin, Goodman,Nelson, Orazem Voting nay: None Absent: None Resolution declared adopted and signed by the Mayor this 22nd day of September, 2015.