Council Memo

Review of Proposed Water Service Outside of City Limit


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Recommended Action: This item is for discussion only. No formal action will be taken.


Item Summary


This item is to discuss proposed amendments the City Water Policy and City Code, Sections 2-1-8 and 2-1-12 to serve water and adopt regulations for water service to parcels outside of the City limits.






Meeting History

Feb 25, 2020 1:00 PM  City Council Study Session Meeting
draft Draft

Senior Assistant City Attorney Clyde Halstead provided a presentation to Council regarding the proposal of water service outside of city limits and addressed the public statement from CWAG in support of this if it includes unsewered areas. He reiterated that citizens have asked the city to engage in regional cooperation which this accomplishes and that the goal is to look at individual wells and septic tanks and try to get those onto city water by meeting Prop400 requirements and addressing possibilities for annexations.


* Reduce Overdraft in AMA

* Improve Water Quality

* Increase Recharge

* Decrease Lost Water

Any properties added to city water would be required to meet our standards and would have to go through the normal review process.

Current Policy:

* City does not provide “new” water connections outside of city limits (there are areas outside of the city where water is currently provided based on previous agreements)

* Development outside of city service area supported by exempt wells is typically done with hauled city water

Mr. Halstead reviewed the general plan map which includes the proposed expansion area and discussed the 3000 homes outside of city limits which are currently being supported by city water.

Public Works Director Craig Dotseth clarified that there are two groups (those within the city and those outside of) comprising of approximately 1200 and 1800 homes that are on septic and unmetered wells.

Exempt wells in the Prescott AMA present an issue and account for 97% of the wells in the AMA and this means that they are exempt from laws pertaining to usage. State legislature is unwilling to make changes but expansion of city services would hep with this a lot.

Issues with Wells & Septic:

* Exempt Well: exempt from state law and annual reporting

* Septic Tanks: more than 90% of septic water evaporates and does not recharge

* Water Quality: water making it back to aquifer is of poor quality and impairs creeks and lakes

Requirements to Obtain Water Outside of City Limits:

* Sewer Tie-in

* Infrastructure availability or expansion

* City Codes and policy compliant

* Abandonment of wells and septic tanks

* Outside city water rates apply + cost of water

* All Prop400 requirements

Councilman Sischka asked if sewer is offered outside of city limits where it does not already exist who would pay for that development.

Mr. Halstead commented that the developer would bear those costs and reiterated that they would have to meet all Prop400 requirements as well. The general plan includes a map of where applications could be submitted into the expansion area.

Mayor Mengarelli asked if that expansion area included northern stretches of Deep Well Ranch.

City Manager Michael Lamar confirmed and commented that a portion of the property was annexed in for development and the balance was put into a trust to remain the ranch which was a part of the original development agreement.

Councilman Goode asked if Council were to adopt the policy and service the expansion area and the Prescott Valley annexed in those areas how would the city go about enforcing the water service agreements that now exist in a different municipality.

Mr. Halstead stated that this is something we already do in Chino Valley, however, it would also be possible to include that if a municipality annex’s in they would have to have water provided by someone else. Contracts would be enforced in the same manner as other water service provider would do.

Councilmember Rusing commented that the general plan map looks vague to her, but that she feels the indicated expansion area is unmanageable. She asked why is Deep Well Ranch is included in the expansion zone if it is going to remain a ranch. She feels we need to complete AED negotiations before moving onto adopting this policy otherwise out only bargaining chip is lost; and expressed her concern that if we expand water service into the county we would not see any tax dollars without annexations. Her fear with adoption of a policy like this is that it would cause a plat rush of water service agreements and then the potential to have to maintain 40 square miles of main lines on the tax payers dime. Water has been conserved to protect the Verde and not to fuel more growth or benefit a handful of developers. She sees no benefit to the taxpayers of Prescott with adopting this policy and while CWAG does support many elements of the expansion they do not support water outside of city limits without annexation. How are going to force county residents to hook up if they don’t want to do it, we need to have a plan and focus in the city first and decrease the expansion area.

Mr. Halstead commented that the expansion area is what was approved by residents in the general plan which is why we have this proposal and many service areas throughout the state of Arizona are much larger than ours. He commended that commercial service outside of city limits is one of may misconceptions approval of a huge commercial development outside of city limits is highly unlikely, and nobody would be guaranteed water that is simply not the case. Any request for service would come back to Council and go through the same process as all new services within the city limits. Installation of the lines would not be done by the city, but would be turned over to the city for maintenance which would be covered by the 30% increase and make in-city service likely cheaper. No one would be forced to connect, but there would be incentive for those provided with water to connect to sewer. Sewer and well issues within city limits are already being addressed and staff is actively engaged in these discussions as well as those related to conservation.

Councilman Blair commented that a contract would be required for any new service whether it be residential or commercial and if it were commercial taxes would come back to the city. He said it amazes him that someone would rather see septic and wells than have the city expand its services and connect our own residents. He has worked hard over the last several years to address the issues of septic and wells and that work continues.

Mayor Pro Tem Orr commented that the area approved in the general plan's expansion area is all on the same aquifer and this would offer the opportunity to return to that aquifer.

Mayor Mengarelli thanked staff for their efforts and for working with the special interest groups in the community to make revisions to this policy. He reiterated that Prop400 requirements would be met, that Phoenix, Mesa and Tucson all provide water outside of city limits, and that every new project would come before Council to review whether it is water, or an annexation so they can determine what is beneficial for the community. It seems there is a lot of bad information out there even though we have been at this for awhile, but perhaps it is best to take more time and ensure that people really understand it all. He likes water outside city limits and feels it is the best step in helping to manage the AMA.

Councilwoman Scholl asked what the potential impact on the AED negotiations would be - how this would or wouldn’t affect the AED negotiations.

Mr. Lamar commented that the community is at a point where a determination regarding AED needs to be made and there is a probably of being able to tie that in related to the policy.

Mayor Mengarelli echoed Mr. Lamar's comments and asked Mr. Halstead to address Section 4 and the option for an IDA.

Mr. Halstead commented that Section 4 of the proposed policy would make IGAs exempt in the circumstance where a project comes in and brings all of the water that is required that project. In this case the city would be able to set the terms for the water services. These are very rare occasions, but staff is looking into something similar for a church in Chino Valley that Council may see an IGA for at a future meeting. It essentially provides the option for more of a "one-off" agreement.

Mayor Mengarelli commented that while we favor annexation in this scenario, but if a portion of that did not happen and the developer wanted to be guaranteed water then this provision would guarantee them the ability to develop in the county with the water that they bring to the table.

Mr. Halstead confirmed, the water could be guaranteed if the land (ie the Dells and area around the airport) were confirmed as part of the deal regardless of whether or not the annexation takes place.

Mr. Lamar also commented that it would be possible to define the land section that the water would be placed on.

Councilman Blair commented that we need to stop messing around with all of this or it is going to go away. He supports a positive policy that will clean up the environment and help in situations like this, we can't lose it because of ignorance.

Mayor Mengarelli asked if, in the interest of getting things moving with AED, it would be possible to take Section 4 of the proposed policy and remove it in order to spend more time working on the specifics of the water outside of city limits policy as well.

Mr. Lamar said that is possible, at this time the developer does not have water in it's totality to do all that is indended with the development. The proposal would be to purchase the rocks and 448 acres with water, giving them the water needed to complete the project which is where Section 4 would come in.

Mayor Mengarelli commented that it is important to take the time to educate the public about water outside of the city limits, but not slow down the AED negotiations so if they could be pulled a part and voted on separately that would be his preference.

Councilman Sischka that we have been holding public meetings on this subject for so long, and at some point we need to set a time limit.

Mayor Pro Tem Orr echoed the need to move ahead on AED as soon as we can and she likes the idea of pulling Section 4 to be voted on separately so that can happen.

Councilman Sischka commented that if pulling out Section 4 will get this done for the Dells than we need to do that; but it is also important that we look at the parameters for how we inform the public.

Public Comment:

Leslie Hoy, member of the public, addressed Council regarding incorrect information on the CWAG facebook page and advised that they should speak with Joe Trudeau regarding any information that may be there. She stated that she appreciates the inclusion of Prop400 detail, but wants the cost/benefit analysis to be re-reviewed. She wants to know where did the 10,000 acre feet of water that is claimed to exist in the city comes from and how that loophole was found.

Mr. Lamar commented that there is not a loophole and this is part of the misinformation that they have already discussed.

Councilman Sischka stated that we are allowed to pump 16,000 acre feet of water and are only pumping 6,800.

Gordon Bond, member of the public, addressed Council regarding taking a timeout from further consideration of water without annexation policy because, as confirmed by Gary Woodard, each new house causes a net negative impact on the system. Council has asserted that the aquifer will be better off with the policy but he hasn't seen any calculations that is the case.

Doug McMillan, member of the public, addressed Council regarding the need to look at supply side of water and legal water versus physical water. ADWR has 4th Management Plan it really ties our hands, imbalance in the aquifer and long term risk needs to be minimized. Recharge is occurring in Granite Creek and it is the heart of the recharge area. Need sustainable alternatives.

City Clerk Sarah Siep read a comment submitted by Ralph Hess.

Amber Fields, member of the public, addressed Council thanking them for listening to the community and changing portions of the policy. She commented that the map that was shown today is different than what has been posted in the past by the city and that perhaps some of the misinformation out there is from the city, and asked about the 25% open space requirement and ensuring that is addressed. Ms. Fields thanked Mayor Mengarelli for offering to extend the timeline on this but said that is needed on AED as well.

Howard Mechanic, member of the public, addressed Council regarding the differences in the policy he noticed from the Prop400 requirements. Nobody disagrees that exempt wells will benefit from service outside city limits but question is the large parcels and the potential negative impact on the aquifer. He believes the major issue here is safe yield, and he thought all parties in AMA would come together to discuss safe yield and that needs to happen.

Mayor Mengarelli commented on the summit that took place between parties in the AMA.

Travis Rushing, member of the public, addressed Council regarding an AZ Republic article about water not being able to keep up with growth in the valley, seems to have identified many right steps for moving forward. He asked Council what is standing in their way to do what needs to be done.

Paula Burr, member of the public, addressed Council thanking the Mayor for saying that this needs to slow down, it is because of public input to this point that the policy is better than it was before. She felt that saying that it would be easier to annex than get water outside the city was disingenuous and would only allow benefits to those who are adjacent to the city. It is impractical for people who are on wells and septic right now to pay for the infrastructure to connect to water/sewer. Council needs to slow it down, inform the public and get the AED deal done.

Fred Oswald, member of the public, addressed Council regarding his concerns in the overdraft of the aquifer, as we are pumping too much water and haven’t heard anything about reducing that overdraft. Citizens of this community are not happy with the way things are going, and he thinks we should poll the city to see what they think about doubling the size of the population.

Lois Fruhwirth, member of the public, addressed Council regarding reconsideration of approach to how the problem is being addressed, there is not a perfect or clear cut way to address the issues. It is important to engage stakeholders and brings the naysayer to the table in an organized way that is driven by real data and look at all options that citizens have to understand and look at the data. Lots of swirl and frustration over the data which is causing the misinformation that is happening. Community is filled with talented experts that could help city staff and complete analysis and thinks that is what we need to do.