Consideration and Possible Adoption of Resolution No. 2014-05: A resolution of the Council of the City of Flagstaff, Arizona approving a Pre-Annexation, Development and Oversizing Agreement between W. L. Gore & Associates, Inc. and the City of Flagstaff

1) Read Resolution No. 2014-05 by title only
2) City Clerk reads Resolution No. 2014-05 by title only (if approved above)
3) Adopt Resolution No. 2014-05

Business retention and expansion efforts seek to grow existing businesses in the area. As a bio-tech, medical device manufacturer, W.L.Gore & Associates is a community asset employing over 2,000 residents locally. This effort is the first step in their future planning process. In addition, state law allows municipalities and private property owners outside of municipal boundaries to enter into pre-annexation agreements prior to annexation. W.L.Gore seeks to enter into a pre-annexation agreement with the City of Flagstaff to extend and upgrade water service then sewer service to the Woody Mountain Campus on Kiltie Lane. The pre-annexation agreement provides assurances to W.L.Gore while planning for potential future expansion and undertaking the annexation process.   Upgraded water service will provide W.L.Gore & Associates improved water services, quality, and increased capacity for fire protection. By participating in the oversizing of the water line loop, the City of Flagstaff also implements this portion of expanded services to the western edge of the current City limits. 

Financial impacts include the cost of upsizing the water line to meet regional plan. Upsizing costs will be borne by the City Utilities Division. The Utilities Department has approved and budgeted $450,000 in FY14 for this west side waterline expansion. To date, only $10,000 has been spent leaving a remaining amount of $440,000 to be used towards reimbursement.  The engineer's estimate of total probable cost for this waterline expansion is estimated to be $786,250. The City's portion will be the cost associated with upsizing the pipeline from an 8" diameter to an 18" diameter pipe. The exact reimbursement amount will be determined once the actual bids are received. The Utilities Division currently has no monies budgeted for any sewer upsizing at this time. Once the sewer line discussions begin and upsizing becomes a possibility, staff will present the opportunity to Council to determine the level of City participation in that future, potential project. The City is not obligated to participate in sewer line reimbursement and any future request for funding will be brought to Council for approval prior to any action. 

Effective Governance - This Pre-annexation, Development and Oversizing Agreement Between W.L.Gore & Associates Inc. and the City of Flagstaff is a project that conveys effective governance through the collaboration with private industry to plan for future growth. In that same manner, the project retains and expands a diverse economic base.

No.  While Council approved a pre-annexation agreement through Resolution 2005-65 in 2005, Council has not taken any action on this current item.  Council approved CIP budget expenditures in April 2013 for this waterline expansion.

1)  Approve Resolution 2014-05 and authorize the agreement as proposed.
2)  Amend and approve Resolution 2014-05.  This may delay or prevent implementation of the agreement as it may require additional negotiations with W.L. Gore.
3)  Reject the request for pre-annexation entirely. This option may compel W.L.Gore to consider other locations outside the region that may allow for future growth.

W.L.Gore & Associates has been in Flagstaff since 1967 where they have grown over the years to be one of the largest private sector industries in the region. Home to their medical services division, W.L.Gore has also earned the place of being the largest bio-medical research and developer and manufacturer in the region attracting highly skilled employees from around the world and producing various spin-off companies that have remained in the region as well. Additionally, W.L.Gore & Associates requested an Out of City Water and Sewer Service Agreement in January 2013. The request was approved by the Water Commission contingent upon W.L.Gore entering into appropriate agreements for each service and upon a pre-annexation agreement regarding their property.

The Pre-annexation, Development and Oversizing Agreement will allow W.L.Gore to receive the Out of City Water and Sewer Service Agreement as recommended by the City of Flagstaff Water Commission. The agreement also states that W.L.Gore supports the City annexing the property at a future date.

While waterline upsizing reimbursement costs have been considered and budgeted, sewer upsizing reimbursement costs have not been budgeted at this time. Land acquisition/easement costs for the sewer alignment are unknowns at the present time and will be determined in the future. The City's participation in any sewer line upsizing has not yet been determined. The City is not obligated to participate in sewer line reimbursement. Any future request for funding will be brought to Council for approval prior to any action.  

W.L.Gore & Associates employs over 2,000 people locally. As many of their employees are educated in medical, engineering, and manufacturing disciplines, those employees also seek to provide their children and communities with access to educational opportunities to grow the next generation of employees in those fields. This dynamic translates to great interest in STEM fields of study and robust interaction in the community and education system. There is also an economic benefit for the community in having higher wage employees in the region.

There has not been any community involvement at this time. The annexation process, however, by State Statute will require public notice to residents and public meetings, with ultimate approval to be provided by Council during a regularly scheduled council meeting.