Department of Utilities and Community Development
Reference: Fourth Amendment to the Comprehensive Funding Plan
To: Mayor Gregory Mills and Members of City Council
Through: Michael P. Martinez - City Manager
Prepared By: Scott Olsen - Director of Utilities
Date Prepared: September 23, 2024
PURPOSE
To provide an overview of the proposed Fourth Amendment to the Comprehensive Funding Agreement with Prairie Center.
BACKGROUND / DISCUSSION
The item was originally presented to City Council at the June 25, 2024, study session. The City entered into a Comprehensive Funding Plan, Master Development Agreement, Pre-Annexation Agreement, and Intergovernmental Agreement for Prairie Center in December of 2005. The financing agreement includes a list of public improvements that may be reimbursed through a series of financing, including a credit PIF (1.25%) and an additional PIF (1.00%) and other rebates. The agreement sets a reimbursement cap that has increased through amendments to the agreement. The goal of the various agreements was to develop Prairie Center as a master planned, mixed-use project financed through metropolitan districts for the construction of public improvements. The agreement and its three previously approved amendments are a complex mechanism of funding, repayment, and development requirements. Finance Director Catrina Asher provided an overview of the financial implications of the agreements at the September 26, 2023, City Council study session.
As part of the agreement, an open space and a trail connection by Lutz Reservoir were planned. Originally, Lutz Reservoir was intended to only serve the Prairie Center metropolitan districts and would not be owned by the City. The City has been negotiating for transfer of Lutz Reservoir to the City for non-potable irrigation use in an expanded service area. This transfer will occur with the Fourth Amendment to the Comprehensive Funding Agreement.
The City previously awarded a contract to JR Engineering for the design of a pump station and transmission main at Lutz Reservoir for the non-potable system. The design contract also included the design of a parking lot and trail connections for the open space. During the design process, City staff and the consultant determined the appropriate service area for the non-potable irrigation system and the necessary requirements to serve that area. The service area was then broken into several phases based on assumptions regarding the timing of development. System hydraulics were determined based on the overall service area and land uses from the Comprehensive Plan and/or development plans.
Lastly, City staff worked with various consultants to determine the impact the non-potable reservoir would likely have on potable water demand as the City continues to grow. Staff and the consultants estimated demand at City build-out (determined from Community Development’s presentation on growth several years ago). At a population of 135,283, it is estimated that the potable demand will be approximately 42.7 million gallons per day in the peak summer/irrigation season. With the implementation of the Lutz non-potable irrigation system, a 10 to 15% reduction in overall peak demand may be seen. This would reduce the peak demand at full build-out to approximately 38.4 million gallons per day. This is a very large reduction in potable water demand.
The civil engineering plans for the pump station, intake structures, non-potable transmission main, parking lot and trail connections are complete. The construction services project was awarded by City Council on October 15, 2024.
In order to move forward with the project, an amendment to the Comprehensive Funding Agreement is required. The Fourth Amendment to the Comprehensive Funding Agreement addresses various matters related to parks and open space and the Lutz Reservoir non-potable system. The Amendment ensures that the City will maintain a non-potable water rate, establishes that the City will own and maintain the non-potable water system in the Lutz service area and dedicates ownership of the existing system components to the City in an “as-is” condition. Concurrent with execution of the Amendment, the District will transfer ownership of the Lutz parcel to the City for the non-potable system, reservoir, and open space. Lastly, the Amendment establishes that certain improvements made previously will be eligible for reimbursement under the Comprehensive Funding Agreement, requires the City to complete the reservoir pump station project, and to serve non-potable water for irrigation use. Related to parks and open space, the Amendment requires that the City complete certain trail connections in and adjacent to the Lutz parcel within a certain time period and to open such areas/trails to the public.
STAFF RECOMMENDATION
Staff recommends approval of the Fourth Amendment to the Comprehensive Funding Agreement.
OPTIONS FOR COUNCIL
• Approve the Ordinance
• Deny the Ordinance
• Provide further direction to staff
ATTACHMENT
● Ordinance
● Fourth Amendment to the Comprehensive Funding Agreement
● PowerPoint Presentation