AGENDA CAPTION:
Title
Consider approval of Resolution 2026-114R, approving revisions to Amendment No. 3 to the 2024 Regional Wastewater Treatment Plant Cost Sharing Agreement to remove Mulberry Meadows as a participating developer; authorizing the City Manager, or her designee, to execute the amendment to Resolution 2026-35R on behalf of the city; and declaring an effective date.
Body
Meeting date: July 7, 2026
Department: Legal/Engineering/Utilities
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Fiscal Note:
Prior Council Action: 2024-078R Approving a Cost Sharing Agreement; 2025-056R approving Amendment No. 1; 2025-226R approving Amendment No. 2; and 2026-35R approving Amendment No. 3 (but was not executed);
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Background Information:
This revision to amendment No. 3 makes one additional change by Mulberry Meadows who has requested to be removed from the cost sharing agreement. This revised amendment will simply add the following line to the previously approved amendment No 3:
• “Upon the execution of this Amendment 3 by all parties hereto Mulberry shall be released from the Agreement and shall have no further rights, duties, obligations, or liabilities under the Agreement.”
With Mulberry and Highlander no longer part of the agreement, the LUE fees will cover all anticipated debt payments through 2030. As a reminder, Highlander terminated its participation after Amendment No. 2 when the required easement was not provided by JLBC 710 Investments, LLC. It is anticipated that both Mulberry and Highlander sites will be developed in the near future and the City will simply collect impact fees for these locations. The City is expected to adopt a new impact fee for wastewater later this year and those fees, in addition to new rate payers coming on-line, will be used to help off-set this debt payment in the future.
The City entered into a Cost Sharing Agreement (“CSA”) in May 2024 for the construction of a new wastewater treatment and water reclamation facility near FM 1978. The agreement with multiple developers provides for the City building the initial water reclamation facility to serve the developers’ 6,000 living unit equivalent (a 2 million gallon a day plant), which the City can eventually expand up to 8 million gallon a day (almost the size of the existing City facility on River Road). The CSA was amended in January 2025 to, among other things, add three other developments to the CSA and then again in November 2025 to change the date required to provide initial service to March 1, 2027.
In fall 2025, the CSA participating developers requested changing the CSA construction and payment schedules to account for slower than anticipation development in the area. In response to this request, the City required a change in service date and to adjust the new plant’s in-service date. The developers agreed to expedite the service date change, which was executed in Amendment No. 2 with Council approval in November 2025, so the City could eliminate costs associated with providing service by March 2026, while we worked out the details of the remaining changes to be incorporated in this Amendment No. 3.
Amendment No. 3 reduces 2026 and 2027 payments and revised construction schedules for some of the developers. The benefit to the City in accommodating these changes is the cost avoidance associated with the purchase of a temporary treatment facility and reduced pump and haul requirements. The savings to the City is over $5,000,000. Additionally, the developers agreed to adjust their individual LUE Fee payments so that the City recovered the same net present value of the initial payment plan even though the payments were changed or extended. The last revision that will be added by this item is allowing Mulberry to leave the agreement.
The 2025 revenues collected through the CSA were $1,917,000 and the anticipated 2026 is $3,849,800 with a total LUE contribution of over $49M by these developers.
The water reclamation facility is currently on schedule to be online in late 2028.
Council Committee, Board/Commission Action:
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Alternatives:
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Recommendation:
Staff recommends approval.