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Council approves water purchase and removes $75M PID cap, sets new cap with 4.5‑mill limit
Summary
Council approved a series of agreements to acquire developer water and fund regional infrastructure through the Gateway PID, approved a purchase and reimbursement agreement for Western Mortgage/Gateway PID, and amended PID governing documents to remove a $75 million hard cap (council added a higher cap condition and kept the 4.5‑mill levy cap).
The Hurricane City Council approved multiple water‑and‑PID items intended to advance regional infrastructure in the Gateway area, including a water purchase and reimbursement agreement with Western Mortgage, a separate water‑rights purchase, and an amendment to the Gateway PID governing documents that removes a prior $75 million hard cap.
City Attorney Dayton summarized the Western Mortgage deal as a three‑party structure in which Western Mortgage would deed roughly 1,700 acre‑feet of groundwater to the city, the Gateway PID would bond for infrastructure (tanks, wells) and the city would collect secondary water impact fees and use 85% of those to pay the PID bond annually. Dayton cautioned that the city will not close until the PID can bond and raise the required capital.
Developers and PID representatives said initial estimates were done before the recent surge in construction and materials costs; Brent (representing the developer/PID) described substantial cost increases and asked for flexibility. PID representatives and staff proposed removing the hard $75 million cap and instead using the existing 4.5‑mill levy cap as the practical limit; council and PID representatives discussed setting an updated hard cap and settled on a higher figure near $205–210 million as a working cap with the 4.5‑mill levy remaining in place.
Council voted to approve the Western Mortgage purchase and reimbursement agreement and then approved amendments to the PID governing documents with the new dollar cap condition and city‑attorney/bond‑counsel approval language. Council also approved a separate purchase and reimbursement agreement to acquire additional well rights and Hurricane Canal shares; those transactions were structured with installment terms intended to spread the city's exposure. City staff said bond counsel had reviewed the amendments and that additional structuring with county officials and bond counsel remains necessary to avoid duplicate taxation or unintended assessments on property owners.
