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BACKGROUND As a condition of Ponderosa's Ironwood project, Ponderosa installed a storm drain line that serves its project as well as other property, namely the City's Operation Services Center, the Kie-Con property, and the Lehman property (which Ponderosa will also be developing). The total cost of the storm drain line and related improvements was $2,070,212. Because this line benefits other properties, Ponderosa has requested to be reimbursed by those property owners whose properties will be benefitted by this line. Also as a condition of Ponderosa's Ironwood project, Ponderosa was required to install a 12-inch water line. City staff, however, requested Ponderosa to install a 16-inch water line because additional capacity was needed in this area of the City. City staff indicated to Ponderosa that the City would reimburse Ponderosa for the incremental cost to upsize this line, a cost of $64,963. Both lines have now been installed and staff has prepared the attached Reimbursement Agreements. DISCUSSION Ponderosa had requested that the City reimburse it $222,432 for the City's share of the storm drain line, relying on an agreement from the 1980's that provided that the City would construct this storm drain line and be reimbursed by others. When the Operations Service Center was developed, however, the City chose not to construct that line but instead constructed a detention pond on the OSC property. With the storm drain line now in place, the City will utilize this line and can use the space previously housing the detention pond. Because of the apparent conflict between the earlier agreement and the conditions of approval that required Ponderosa to build the storm drain line, staff offered to reimburse Ponderosa $50,000, rather than the $222,432, for the City's share of the line. Ponderosa has agreed. Ponderosa will also be reimbursed by Kie-Con when it redevelops ($444,201) and by Lehman/Selway ($109,171) which, coincidentally, Ponderosa will be developing. In addition, in the unlikely event that during the term of the Reimbursement Agreement (10 years), the City should sell the Operations Service Center property to a third party and that new property owner redevelops the property, we would require such owner to reimburse Ponderosa the difference between $222,432 and $50,000 ($172,432). Ponderosa agreed to upsize the water line at the City's request and it is equitable for the City to reimburse Ponderosa for the incremental cost. Submitted by: Rob Wilson Director of Public Works Submitted by: ~~.._ ` _ ~ David Culver Finance Director Approved by: 1 Nel Fi I o City Manager Attachments: 1. Reimbursement Agreement for Storm Drain Facilities 2. Water Facility Reimbursement Agreement Page2of2