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  10.E.       
Meeting Date: 09/06/2022  
From: Bryce Doty, Real Estate Manager

TITLE:
Consideration and Adoption of Resolution No. 2022-45: A resolution of the Flagstaff City Council approving the filing of condemnation proceedings to acquire easements necessary for the Switzer Canyon Water Transmission Main project, Phase IV, A Public Use; and establishing an effective date
STAFF RECOMMENDED ACTION:
1) Read Resolution No. 2022-45 by title only
2) City Clerk reads Resolution No. 2022-45 by title only (if approved above)
3) Adopt Resolution No. 2022-45
Executive Summary:
In June 2022 the City made offers to purchase water line and temporary construction easements for the Switzer Canyon Water Transmission Main Phase IV, based on appraisals of just compensation to be paid. City staff is in negotiations with property owners for purchase of the easements. These negotiations are ongoing and will continue; however, the property rights need to be obtained so that the City is able to proceed with public procurement of the construction contract in fall 2022.  Construction will need to commence in spring 2023 so the work can be completed before winter 2023. 

This resolution authorizes staff to file condemnation proceedings in order to obtain immediate possession of the property rights so the project can proceed on schedule.   After the filing, the parties may still reach an agreement as to just compensation to be paid for the easements. If no agreement is reached, the court will resolve any dispute and determine just compensation to be paid.
Financial Impact:
The acquisitions for the Switzer Canyon Water Main Transmission Phase IV are estimated at $150,000.00
Policy Impact:
N/A
Connection to PBB Priorities/Objectives, Carbon Neutrality Plan & Regional Plan:
Priority Based Budget Key Community Priorities and Objectives
  • Sustainable, Innovative, Infrastructure
Deliver outstanding services to residents through a healthy, well maintained infrastructure system
Utilize existing long range plan(s) that identify the community’s future infrastructure needs & all associated costs
 
Regional Plan
Goal WR.2. Manage a coordinated system of water, wastewater, and reclaimed water utility service facilities and resources at the City level and identify funding to pay for new resources.

Goal WR.3. Satisfy current and future human water demands and the needs of the natural environment through sustainable and renewable water resources and strategic conservation measures.

Goal WR.4. Logically enhance and extend the City’s public water, wastewater, and reclaimed water services including their treatment, distribution, and collection systems in both urbanized and newly developed areas of the City to provide an efficient delivery of services.
Has There Been Previous Council Decision on This:
On September 17, 2019, Council passed Ordinance 2019-26, authorizing the acquisition of real property interests for the Switzer Canyon Water Transmission Main Project - Phases IV and V, but providing that the Council adopt a resolution before proceeding with condemnation.
Background/History:
The City of Flagstaff began the Switzer Canyon Water Transmission Main Project in 2012 and has completed the first three phases.  The project started at the intersection of Switzer Canyon Road and Route 66 and headed north and up Turquoise and across Forest Avenue to Fir Avenue and west on Fir to the Elks Lodge at San Francisco Street.  Phase IV and V are the final stages to complete the project. The line will be installed going north up San Francisco Street and generally follow the existing 16" water line across private property located in unincorporated Coconino County to City reservoirs for approximately two miles.

Securing easement rights along this corridor for a new waterline prompted adjacent and nearby property owners in the County to inquire about receiving City water service in exchange for property rights needed for the project. The properties currently are not eligible to receive water service, under the City policy for providing water service outside city limits.   The City explored the request to provide water service along this corridor on several dates:

On August 27, 2019, during an agenda item authorizing real property acquisitions for Phase IV and V, Council gave direction to staff to explore the option of offering water service in the areas outside the City Limits, possibly in exchange for property rights for waterline easements.

On November 19, 2020, the Water Commission considered the request, and made a recommendation to allow limited water service outside City limits to properties adjacent to the project, subject to conditions: 
  • One water meter per then existing parcel
  • Enter into an agreement not to develop any further on each parcel
  • Pay all applicable fees
On November 18, 2021, seeking clarification on the Water Commission’s previous recommendation, staff brought the issue to the Water Commission again, explaining that when a new water service area is established, per Arizona statutes and/or case law, water service must be offered in an equitable manner and to all parcels within the area or subdivision. Staff explained the challenges with offering or exchanging water service in exchange for real property rights in an equitable manner, as the values of the property rights needed for the project vary greatly, and property rights are not needed from all parcels seeking water service.  Sharing this information resulted in a revised recommendation not to offer water service in exchange for easements.

On December 7, 2021, Council heard and accepted the revised recommendation from the Water Commission but left open consideration of water service in this area via a special improvement district approved by Coconino County.  A special taxing district would set clear boundaries of the new water service area, provide a means to pay for necessary public infrastructure and to acquire easements to connect to the City water line in an equitable manner. Discussions with property owners are ongoing about what terms the City would consider in providing water service in the area to a special improvement district. City staff hopes to engage Coconino County in these discussions.
 
Attachments
Res. 2022-45
Exhibit 1 Legal Descriptions and maps
Exhibit 2 Map showing Phase IV route


    

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