Glendale approves sale of up to 50 acre-feet per year of long-term storage credits to Vi Resorts LLC

The Glendale City Council on Sept. 9 approved an agreement allowing Vi Resorts LLC to acquire up to 50 acre-feet per year of long-term storage credits under a 25-year base term with two 10-year extension options. The council voted to authorize a purchase-and-sale agreement that staff said would let the resort install and operate its own well to recover the credits.

The item matters because the credits represent an ongoing supply of nonpotable recharged water tied to the city’s effluent program and the contract could run as long as 45 years if extensions are exercised. City staff said the full 45-year, 50-acre-feet-per-year scenario would total 2,250 acre-feet of credits; staff also modeled Vi Resorts’ annual sewer discharge at roughly 450 acre-feet per year that the city expects would be available for additional recharge.

In a staff presentation, Ron Serio, director of water services, described the agreement’s structure and the safeguards included. He said Vi Resorts would be responsible for drilling, operating and maintaining the recovery well on the resort site, and for any needed water treatment and reporting to the Arizona Department of Water Resources.

City staff placed the contract’s annual 50-acre-feet figure in context: it would equal about 0.12% of Glendale’s annual potable-water use in a year, and is substantially smaller than two existing effluent agreements the city cited, such as sales to Palo Verde Nuclear Generating Station (roughly 4,000 acre-feet a year) and to Arrowhead Amenities (about 2,700 acre-feet a year).

Council members asked about price escalation and drought protections. Staff said the contract includes an annual inflation adjustment tied to the Consumer Price Index (CPI) or 3%, whichever is greater, and a clause that would permit renegotiation of price if state policy changes or the city is operating under heightened drought restrictions. The agreement’s Article 6 termination provision — read aloud during the meeting — allows either party to seek renegotiation if a change in law, regulation, government policy or declaration affects performance; if renegotiation fails, either side may terminate after at least a six-month written notice unless a change in law mandates an earlier effective date.

During discussion, council members emphasized that the city is currently in a Stage 1 shortage and that the contract contains specific provisions to address Stage 3 or 4 conservation requirements should they occur. Council members also noted that Vi Resorts will bear the capital cost and operating responsibility for the recovery well.

The council approved the agreement by roll call; Chair Jerry P. Weyers cast the deciding vote after other members present voted in favor. The motion carried.