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STRATEGIC OUTCOMES |
ACTION |
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Department: |
☐ Safe & Prosperous |
☐ Motion |
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Utilities |
☐ Active & Appealing |
☒ Resolution |
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☐ Respected & Responsible |
☐ Ordinance - Introduction |
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Division: |
☒ Connected & Engaged |
☐ Ordinance - Adoption |
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☐ Unique & Creative |
☐ Public Hearing |
TITLE:
title
Water Delivery Agreement: Yuma Cogen
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SUMMARY RECOMMENDATION:
Summary Recommendation
Authorize the execution of a new Water Delivery Agreement between the City of Yuma (City) and Yuma Cogeneration Associates (Yuma Cogen). (Jeremy McCall/Utilities).
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STRATEGIC OUTCOME:
This item furthers City Council’s strategic outcome of Connected and Engaged.
REPORT:
Yuma Cogen owns and operates a 55-megawatt power plant at 280 N. 27th Drive, Yuma, Arizona. For the past 30 years, the City has provided between 300 to 800 acre-feet of untreated Colorado River water (Raw Water) per year to Yuma Cogen under a Water Delivery Agreement executed on May 19, 1993. This amounts to a little more than 1% of the City’s annual entitlement of 50,000 acre-feet of Colorado River Water.
Under the Water Delivery Agreement, which expires on December 31, 2024, Yuma Cogen paid the City a demand charge and a consumption charge for Raw Water deliveries. In 1993, the Raw Water demand charge was set at $67 per acre-foot for 320 acre-feet of water but was subject to annual adjustment based on the Consumer Price Index (CPI). Due to annual CPI adjustments, the Raw Water demand charge was $147 per acre-foot in 2023. The per acre-foot charge for Raw Water consumption was initially set (and has remained) at 45% of the amount determined by dividing the annual budget of the City’s Water Utility Division by the total volume of water delivered to customers for the previous year. In addition, Yuma Cogen holds an option to purchase effluent water from the City (provided that Yuma Cogen first constructs the infrastructure necessary to deliver effluent water from the City’s wastewater plant to Yuma Cogen’s power plant).
Yuma Cogen and City staff propose a new 20-year Water Delivery Agreement (New Agreement) that largely preserves the existing water delivery arrangement. Under the New Agreement, Yuma Cogen would continue to pay the City a demand charge and a consumption charge for Raw Water. The formula for calculating the annual consumption charge would remain the same. The demand charge, on the other hand, would start at $150 dollars per acre-foot and would grow 3% per year over the life of the New Agreement instead of being subject to an annual CPI adjustment. This change allows the parties to calculate the annual increase in the demand charge over the 20 years instead of performing a yearly calculation based on annual CPI growth.
FISCAL REQUIREMENTS:
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CITY FUNDS: |
$ 0 |
BUDGETED: |
$ 0 |
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STATE FUNDS: |
$ 0.00 |
AVAILABLE TO TRANSFER: |
$ 0.00 |
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FEDERAL FUNDS: |
$ 0.00 |
IN CONTINGENCY: |
$ 0.00 |
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OTHER SOURCES: |
$ 0.00 |
FUNDING: ACCOUNT/FUND #/CIP |
TOTAL $ 0.00
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FY 2023 City Engineering Budget |
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To total; right click number & choose “Update Field” |
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FISCAL IMPACT STATEMENT:
This resolution would generate a positive fiscal impact.
ADDITIONAL INFORMATION:
SUPPORTING DOCUMENTS NOT ATTACHED TO THE CITY COUNCIL ACTION FORM THAT ARE ON FILE IN THE OFFICE OF THE CITY CLERK:
NONE
IF CITY COUNCIL ACTION INCLUDES A CONTRACT, LEASE OR AGREEMENT, WHO WILL BE RESPONSIBLE FOR ROUTING THE DOCUMENT FOR SIGNATURE AFTER CITY COUNCIL APPROVAL?
☐ Department
☒ City Clerk’s Office
☐ Document to be recorded
☐ Document to be codified
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Acting City Administrator: |
Date: |
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John D. Simonton |
12/09/2024 |
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Reviewed by City Attorney: |
Date: |
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Richard W. Files |
12/09/2024 |