TC Res. No. 2009-30 APPROVING A SECOND SUPPLEMENTAL WATER LEASETOWN OF AVON, COLORADO
RESOLUTION NO. 09-30
Series of 2009
A RESOLUTION APPROVING A SECOND SUPPLEMENTAL WATER LEASE
AGREEMENT WITH THE UPPER EAGLE RIVER WATER AUTHORITY
WHEREAS, the Upper Eagle River Water Authority ( "Authority ") is a quasi - municipal
corporation established pursuant to an Intergovernmental Agreement dated September 18, 1984,
among the Arrowhead Metropolitan District, the Town of Avon as successor to the Avon
Metropolitan District ( "Avon "), the Beaver Creek Metropolitan District, the Berry Creek
Metropolitan District, the Eagle -Vail Metropolitan District, and the Edwards Metropolitan
District (collectively the "Member Districts "), and the Authority is the owner or lessee of the
water rights and facilities that provide water service by contract to existing and projected
developments within the service area of its Member Districts; and
WHEREAS, pursuant to the Amended and Restated Water Lease dated effective as of
January 1, 1998, between the Authority and the Town, the Town leased to the Authority certain
water and water rights, ditches and ditch rights, wells and groundwater rights, springs and spring
rights, and reservoirs and storage rights described as an undivided 77.7% interest in the water
rights described on Exhibit A attached to the Restated Water Lease; and
WHEREAS, pursuant to the Supplemental Water Lease dated July 14, 2005, the Town
leased to the Authority the remaining 22.3% undivided interest in and to the subject water rights
and the Supplemental Water Lease states that the entire interest in the subject water rights leased
to the Authority by virtue of the Restated Water Lease and the Supplemental Water Lease are
adequate to replace depletions associated with lake evaporation (42.30 acre feet), non - potable
irrigation in the amount of 19.58 acre feet, and potable water service for up to 4,984 equivalent
residential units single family equivalents (SFE); and
WHEREAS, pursuant to the Supplemental Water Lease dated June 25, 2009, the
Authority agreed to increase the number of SFE's that it will serve within the town by 255.55 to
account for additional water requirements of the Confluence Project, increasing the total service
from 4,984 SFE's to 5,239.55 SFE's; and
WHEREAS, subsequent to the Supplemental Water Lease, the Authority and Vail
Associates, INC. (the "Company ") entered into that certain Water Service Agreement dated
September 24, 2009, whereby the Company sought water service for property annexed into the
Town known as the Red House development which at full build out will consist of 15 SFE; and
therefore the Authority agreed to service these 15 SFEs at the Red House development provided
certain contingencies were met, including the dedication of certain water rights to the Authority;
and
WHEREAS, the contingencies contemplated in the Water Service Agreement have been
satisfied, and as a result, the Authority and the Town desire to enter into this Agreement
Res, No. 09 -30
Town of Avon
Page 1 of 2
whereby the Authority agrees to increase the number of SFEs that it will serve in the Town by
15, to a total of 5,254.55 SFEs; and
WHEREAS, the Town and the Company entered into an Annexation and Development
Agreement dated June 23, 2009, under which the Company was obligated to dedicate and convey
to the Authority certain water rights, and said agreement contemplated that should the Authority
fail to provide water service to the Red House development for any reason, the water rights
dedicated to the Authority shall be assigned by the Authority to the Town; and
WHEREAS, it is the intent and purpose of this Second Supplemental Water Service
Agreement to increase the maximum number of SFEs to which the Authority will provide water
service within the Town from 5,239.55 SFEs to 5,254.55 SFEs, and insure that the dedicated
water rights for the Red House development are assigned to the Town in the event the Authority
(or any successor entity) fails to provide water service to the Red House development.
NOW, THEREFORE BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN
OF AVON, that the SUPPLEMENTAL WATER LEASE AGREEMENT WITH THE UPPER
EAGLE RIVER WATER AUTHORITY as hereto attached as Exhibit A is hereby approved by
the Town of Avon.
ADOPTED THIS a
ATTEST:
` 2'U 10
DAY OF 2"9.
TOWN COUNCIL
TOWN OF AVON, COLORADO
Ronald C. Wolfe, Mayo
C
C
a M enny
To -n Cl k Li
Res. No. 09 -30
Town of Avon
Page 2 of 2
SECOND SUPPLEMENTAL WATER SERVICE AGREEMENT
This Agreement dated this 24th day of September, 2009, is between the Upper Eagle
Regional Water Authority, a quasi - municipal corporation and political subdivision of the State of
Colorado (the "Authority "), and the Town of Avon (the "Town "), a municipal corporation.
RECITALS
A. The Authority is a quasi - municipal corporation established pursuant to an
Intergovernmental Agreement dated September 18, 1984, among the Arrowhead Metropolitan
District, the Town of Avon as successor to the Avon Metropolitan District ( "Avon "), the Beaver
Creek Metropolitan District, the Berry Creek Metropolitan District, the Eagle -Vail Metropolitan
District, and the Edwards Metropolitan District (collectively the "Member Districts "). The
Authority is the owner or lessee of the water rights and facilities that provide water service by
contract to existing and projected developments within the service area of its Member Districts.
B. Pursuant to the Supplemental Water Service Agreement dated June 25, 2009,
between the Authority and the Town, the Authority committed to provide water service to a total
of 5,239.55 single family equivalent residential units ( "SFEs ") in the Town.
C. Subsequent to the Supplemental Water Service Agreement, the Authority and The
Vail Corporation (the "Company") entered into that certain Water Service Agreement dated
September 24, 2009. Pursuant to the Water Service Agreement, the Company sought water
service for redeveloped property annexed into the Town known as the Red House development,
more particularly described in the attached Exhibit A. The proposed Red House development at
full build out will consist of 15 SFEs, which 15 SFEs were not contemplated by the
Supplemental Water Service Agreement. The Authority agreed to service these additional 15
SFEs at the Red House development provided certain contingencies were met, including the
dedication of additional water rights.
D. The contingencies contemplated in the Water Service Agreement have been
satisfied. As a result, the Authority and the Town desire to enter into this Agreement whereby
the Authority agrees to increase the number of SFEs that it will serve in the Town by 15, to a
total of 5,254.55 SFEs.
E. The Town and the Company entered into an Annexation and Development
Agreement for the Red House development dated June 23, 2009, under which the Company was
obligated to dedicate and convey to the Authority certain water rights. Said agreement
contemplated that, should the Authority fail to provide water service to the Red House
development for any reason, the water rights dedicated to the Authority shall be assigned by the
Authority to the Town.
F. It is the intent and purpose of this Second Supplemental Water Service Agreement
to increase the maximum number of SFEs to which the Authority will provide water service
within the Town from 5,239.55 SFEs to 5254.55 SFEs, and insure that the dedicated water rights
for the Red House development are assigned to the Town in the event the Authority (or any
successor entity) fails to provide water service to the Red House development.
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NOW, THEREFORE, in consideration of the premises contained herein and other good
and valuable consideration, the sufficiency of which is hereby acknowledged, the Authority and
the Town agree as follows:
1. Additional Water Service Commitment. The Authority agrees that it will serve an
additional 15 SFEs in the Town in addition to the 5239.55 SFEs that were specified in the
Supplemental Water Service Agreement. These additional 15 SFEs will be available to the Red
House development on the same basis as other users within the Authority's service area to meet
the construction, residential, municipal, irrigation, recreation and other incidental water demands
of the Red House development. The total number of SFEs in the Town that the Authority agrees
to serve now totals 5,254.55 SFEs. The parties' Supplemental Water Service Agreement, the
January 1, 1998 Amended and Restated Water Lease and the July 14, 2005 Supplemental Water
Lease remain in full force and effect as supplemented by this Agreement.
2. Customer Charges. Currently all customers within the Town pay directly to the
Authority plant investment fees and finished water storage fees at the time of hook up, and the
monthly service charges of the Authority. Nothing contained in this Agreement shall modify this
arrangement and all customers within the Town shall continue to be directly responsible for the
payment of such fees and charges.
3. Conveyance Upon Dissolution. As a condition of water service, the developer of
the Red House development dedicated certain water rights to the Authority. Should the
Authority fail to provide water service to the Red House development or should the Authority
cease to exist as a water service entity whether by reason of dissolution, termination or other
reason and there is no successor entity, the Authority shall convey to Avon the following water
rights that were dedicated to the Authority by the developer of the Red House development: two
and one -half shares of Class B Series 2 stock in Eagle Park Reservoir Company amounting to 2.5
acre -feet of water from Homestake Reservoir.
4. Miscellaneous:
(a) This Agreement may not be amended nor any rights hereunder waived
except by an instrument in writing signed by the parties sought to be charged with such
amendment or waiver.
(b) This Agreement shall be interpreted in accordance with and governed by
the laws of the State of Colorado. The forum for resolution of any and all disputes arising
hereunder shall be the District Court in and for Eagle County, State of Colorado.
(c) The paragraph headings herein are inserted for convenience of reference
only and do not define, limit or prescribe the scope of this Agreement.
(d) The parties agree to execute such additional documents as may be
reasonably required to implement the terms of this Agreement.
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and assigns. (e) The terms of this Agreement shall be binding on the parties' successors
(f) Notwithstanding any interpretation of any term or condition to the
contrary, water service to any customer or property within Avon shall be subject to all other
rules, regulations, fees and requirements of the Authority.
EXECUTED as of the date first set forth above.
UPPER EAGLE REGIONAL WATER AUTHORITY,
a quasi - municipal corporation of the State of Colorado
By:z.�
Name: opu lc11(�/�l
Title: C(M 1
TOWN OF AVON
By:
Name:
Title:
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STATE OF COLORADO }
ss.
COUNTY OF%'�� )
The foregoing instrument was acknowledged before me this ,22 day of
2009, by DaAe 5 b e4Xe*n , as C A of the
Upper Eagle Regional Water Authority, a quasi - municipal corporation and political subdivision
of the State of Colorado .
Witness my hand and official seal.
PRY
KATHY A.
RISQN
STATE OF
) ss.
COUNTY OF )
My commission expires 4�? , / 4 2a1,2
Notary
The foregoing instrument was acknowledged before me this `3 day of
2000, by ?"Id W4 de as of the Town
of Avon
Witness my hand and official seal. My commission expires �� aolo"'
NoTl4�0 — S.
y ubl ic c
32515 4
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Lots 1 and 2, Exemption Plat of Red House, County of Eagle, State of Colorado, recorded
on November 7, 2000 in the Office of the Eagle County Clerk and Recorder at Reception
No. 743459.
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Memo
To: Honorable Mayor and Town Council
Thru: Larry Brooks, Town Manager
From: Justin Hildreth, P.E., Town Engineer i f r T—N1 H
Shane Pegram, P.E., Engineer II
Date: November 2, 2009
Re: Resolution 09-30 Second Supplemental Water Lease Agreement with the Upper
Eagle River Water Authority to Include the Red House Development
Summary: In 2005, the Town of Avon (TOA) and the Upper Eagle River Water Authority (UERWA)
updated the water lease agreement in which TOA leases its water rights to UERWA in exchange for
the UERWA providing water service to TOA. In June 2009, the Town entered into an Annexation
and Development Agreement with The Vail Corporation (Owner) for the Red House Development.
The development agreement obligated the Owner to dedicate water rights to the UERWA to account
for the development's water service needs. The Town was obligated by the development agreement
to enter into an agreement with UERWA that caused said water service to be provided to the Owner.
The Second Supplemental Water Lease Agreement will update the Water Lease Agreement to
include the Red House Development.
Previous Council Action:
• January 1, 1998: The Avon Town Council and UERWA entered in to an Amended and
Restated Water Lease
• July 15, 2005: The Avon Town Council approved the Supplemental Water Lease with the
Upper Eagle Regional Water Authority.
• January 24, 2006: The Avon Town Council approved Ordinance 06 -03, An Ordinance
Approving an Amendment to the Confluence Planned Unit Development.
• April 27, 2006: The Avon Town Council, UERWA and East West entered into an Agreement
for Dedication of Augmentation Water and Related Water Rights for the Confluence Project.
• June 25, 2009: A Supplemental Water Service Agreement was entered into with UEWRA to
service an additional 255.55 SFEs to the Town. The additional SFEs accounted for water
requirements of the Confluence Project and increased our total SFE count from 4,984 to
5,239.55.
• June 23, 2009: An Annexation and Development Agreement was entered into by the Town
and The Vail Corporation for the Red House development.
Background: In 2005, the Town of Avon renegotiated the lease agreement for the administration of
all Avon water rights with UERWA. The scope of the lease agreement includes all areas previously
served by Avon Metropolitan District water service, generally consisting of the TOA boundaries and
excluding the Eaglebend Subdivision, Gates and Folson parcels, and the Village at Avon. During the
negotiation process, Town Staff completed an analysis of water consumption, existing zoning, and
future water demand. During this analysis, TOA reached an agreement with UERWA resulting in the
total water available for the Town of Avon to total 386.03 consumptive acre -feet. This volume of
water will serve up to 4,984 SFEs (Single Family Equivalents) of domestic water service, of which
4,793 SFEs are allocated to existing subdivided lots and 191 reserved for future municipal services.
At the time, Town Staff determined that the Town could supply water to new developments up to the
maximum underlying zoning, as well as redevelopment up to existing zoning.
Since then, Town Staff has required all large developments involving upzoning to provide additional
water rights above those provided by Avon under existing zoning. Providing adequate and
acceptable water rights is a condition of final plat approval per Avon Municipal Code Section
16.24.140 (7). On June 25, 2009, TOA and UERWA entered into a Supplemental Water Service
Agreement to provide 255.55 additional SFEs for the water service required by the development of