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Home My WebLink About004 CIL Rebate Agreement_Final AGREEMENT FOR GRAF APARTMENTS LLC CASH-IN-LIEU OF WATER RIGHTS This AGREEMENT is made and entered into on the date of last execution by and between Graf Apartments LLC, with offices at 1735 South 19"'Avenue, Suite B, Bozeman, MT 59718,hereinafter called"GRAF APARTMENTS"and the City of Bozeman, a municipal corporation and political subdivision of the State of Montana,with offices at 121 North Rouse Avenue, PO Box 1230, Bozeman, MT 59771-1230, hereinafter called the"City". WHEREAS, GRAF APARTMENTS is in the process of obtaining approval by the City for the development of a 457 unit apartment project containing eighteen (18)apartment buildings, a leasing office, a maintenance building, a clubhouse and outdoor swimming pool, public parkland, common open space, and other site improvements; WHEREAS, the development is assigned by the City application number 19309, which is more commonly referred to as the 2131 Graf Master Site Plan and is hereinafter called the "Project'; WHEREAS, individual phases of the Project must be approved through the City's site plan review and approval process; WHEREAS, Section 38.410.130 Bozeman Municipal Code(BMC)sets forth water rights requirements that the Project must meet to obtain site plan approval. WHEREAS, Administrative Order 2013-07 provides a manual of guidance,hereafter called the "Manual", pertaining to calculations of demand for water use as related to water rights requirements at Section 38.410.130 BMC. WHEREAS, it is the intent and purpose of GRAF APARTMENTS and the City to hereby enter into an Agreement for GRAF APARTMENTS to satisfy the cash in lieu of water rights requirement for the Project with consideration given for the installation of showerheads, clothes washers, and toilets meeting a certain high efficiency performance standard. NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, it is hereby agreed as follows: 1. Project Description This agreement pertains to, and includes, the master site plan project designated as City application number 19309, identified as the Icon Apartment Homes at 2131 Graf Master Site Plan project that is being developed by GRAF APARTMENTS on an existing tract of land legally described as Lot 2, Minor Subdivision No. 235, City of Bozeman, Gallatin County, Montana. 2. Cash in Lieu of Water Rights Requirement GRAF APARTMENTS has been informed of, and agrees to comply with,the cash in lieu of water rights(CILWR) requirements at Section 38.410.130 BMC and understands that the Administrative Order 2013-07 is a guidance manual for the administration of water rights requirements at Section 38.410.130 BMC. Cash-In-Lieu of Water Rights Agreement with GRAF APARTMENTS Page 1 of 6 Demands for water for which CILWR apply are those demands supplied from the City's municipal water system anticipated on an annual basis. CILWR is calculated by equation [EQ-1]. CILWR =[Indoor Demand(AF) + Outdoor Demand(AF)1 *$6000/AF[EQ-11 3. Baseline Residential Indoor Demand Part III of the Manual contains demand calculation methodologies for CILWR. For purposes of this Agreement,the calculation methodology employed for baseline indoor residential demand is the comparable water usage basis. Water meter records from billing years 2011 through 2018 registered during the winter period for all single-family residential buildings connected to the City's municipal water system with an original date of construction of 2009 or later will serve as the comparable water usage basis. These meter records represent indoor water use occurring in the City for the contemporary single- family residential housing type since outdoor irrigation demand does not occur during the winter period. For purposes of this agreement it is assumed that indoor water use in multi-family apartment units is equivalent to contemporary single-family residential indoor water use. Analysis of these contemporary single-family water meter records determine a daily per capita indoor residential water demand of 42.0 gpcd. The annual baseline indoor residential water demand for the Project is calculated by equation [EQ-2]. For purposes of this Agreement each housing unit of the Project contains 2.24 persons in accordance with the average household occupancy from U.S. Census Bureau 2019 Quickfacts data for the City of Bozeman. Baseline Indoor Residential Demand=gped *no. of persons *365 days/yr * 1 AF1325,851 gal [EQ-21 = 42.0 gpcd *457 units *2.24 persons/unit *365 days/yr * 1 AF/325,851 gal =48.16AF 4. High Efficiency Indoor Residential Demand Baseline indoor residential water demand is reduced through the installation of certain high efficiency showerheads, clothes washers, and toilets. A 20.4% reduction in baseline indoor residential demand is achieved by the high efficiency performance standards listed below for these water using fixtures. High Efficiency Showerhead: 1.5 gpm WaterSense®labeled High Efficiency Clothes Washers: CEE Tier 1,2,or 3 High Efficiency Toilets: 1.28 gpf WaterSense®labeled The annual high efficiency indoor residential water demand for the Project is calculated by equation [EQ-3] High Efficiency Indoor Residential Demand=Baseline Indoor Demand * (1-0.204)[EQ-3] = 48.16 AF * 0.796 = 38.34 AF Cash-In-Lieu of Water Rights Agreement with GRAF APARTMENTS Page 2 of 6 5. Other Indoor Demand The Project contains a leasing office, a maintenance building and a clubhouse with an outdoor pool facility that will be supplied water from City's municipal system. For purposes of this agreement these water uses will be considered other indoor demands and will employ comparable water usage basis from Part III of the Manual to determine the anticipated average annual water demand. The clubhouse and pool facility at the South University District student housing development is used as a comparable facility for the clubhouse and pool of the Project. Analysis of the last 12 months of water meter data (August 2019—July 2020)determines an annual water demand of 0.57 AF for the South University District clubhouse and pool; thus, a demand of 0.57 AF is applied to the comparable facility of the Project. For purposes of this agreement it is assumed that the indoor water use of the leasing office and maintenance facility buildings are ancillary components of the indoor water use accounted for in Part 3 of this Agreement. 6. Outdoor Demand For purposes of this Agreement, an outdoor water demand of 0.0 AF applies since GRAF APARTMENTS intends to use three separate exempt groundwater wells to supply the Project's outdoor irrigation needs,thus avoiding having to irrigate with the City's public water supply. GRAF APARTMENTS hereby confirms that the MT DNRC has verified in writing that an exempt groundwater appropriation of up to 8.1 AF is allowable for the development, which is to be apportioned among three separate exempt well points of diversion each connected to their own separate irrigation system. In the event that any outdoor irrigation demands of the Project are supplied by the City's municipal water system, GRAF APARTMENTS understands and agrees that provision of CILWR for those demands is an added requirement. 7. Groundwater Water Rights GRAF APARTMENTS agrees that upon completion of the Project's required landscaping and irrigation improvements that it will obtain water right ownership in the name of the City of Bozeman for that portion of the exempt groundwater appropriation used for public parkland irrigation. GRAF APARTMENTS will retain water right ownership of those portions of the exempt groundwater appropriation used for irrigation of the Project's common open space and other site landscaping. 8. Baseline Lump Sum Pavment of Cash in Lieu of Water Rilzhts Prior to each site plan approval for any individual phase of the Project, GRAF APARTMENTS agrees to pay a baseline lump sum amount for CILWR to the City as calculated by equation [EQ-4]. Table 1 provides a breakdown by phase of the baseline lump sum CILWR payments for the Project. The lump sum payment will be deposited into the City's CILWR fund. Initial CILWR Payment = (42.0 gpcd *No. of Units in Phase *2.24 persons/unit *365 days/yr I AF/325,851 gal) + Other Indoor(AF)) *$6000/AF [EQ-41 Cash-In-Lieu of Water Rights Agreement with GRAF APARTMENTS Page 3 of 6 No.of Residential Residential CILWR ' Other Indoor Baseline Lump Sum Phase Units Volume(AF) (AF) CILWR Payment($) 1—East ...... ..............._...._....._._..._....._.._...........____.__....._...._....._._.__....._...-.....__._____.._._.._....__........__.._............_._._.__..__.__...._-_,...._.....___........__....._.._.._.__.._..__._..__.__..._._-._._._..._....._.,.._._-- Future West 160 16.86 ' 0.57 $ 104,580 _............._... Future East 102 10.75 1 0.00 $ 64,500 Total 457 48.16 0.57 $ 292,380 Table I 9. High Efficiency Cash in Lieu of Water Rights Rebate The City agrees to rebate back to GRAF APARTMENTS from its CILWR fund that portion of the baseline cash in lieu of water rights payment attributable to the reduction in baseline water use from the installation of high efficiency showerheads,clothes washers, and toilets meeting the performance standards contained in Part 4 of this Agreement installed within the apartment units. The maximum rebate amount for the Project is calculated by [EQ-5]. High Efficiency Rebate = (Baseline Residential Demand(AF)—High Efficiency Residential Demand(AF)) *$6,000/AF[EQ-SJ _ (48.16 AF—38.34 AF) *$6,000/AF _$58,920 GRAF APARTMENTS understands and acknowledges that the City will only issue said rebate upon its confirmation and satisfaction, by inspection occurring at the time of final occupancy for individual apartment buildings of the Project,that high efficiency showerheads,clothes washers,and toilets meeting the performance standards of Part 4 of this Agreement have been installed. GRAF APARTMENTS must coordinate with the City to verify that fixtures meet these performance standards prior to their purchase and installation. Should GRAF APARTMENTS fail to coordinate fixture verification prior to purchase and installation, it acknowledges that it is proceeding at its own risk and understands that rebates will not be given for fixtures not meeting the agreed performance standard. To initiate the rebate, GRAF APARTMENTS agrees to make a written request along with a statement certifying that requisite high efficiency performance standards are met by the showerheads, clothes washers and toilets installed within the building(s)for which the rebate is requested and provide supporting documentation as requested by the City which may include, but not necessarily be limited to, order invoices and installation invoices for the subject fixtures. The rebate amount issued back to GRAF APARTMENTS per building will occur on a proportionate basis as determined by [EQ-6]. CIL Rebate per Bldg = (No. of Apartment Units in Bldg/457 Units) *$58,920[EQ-61 10. Installed Fixtures Not Meeting High Efficiency Performance Standards Any installed fixtures detennined by the City to not meet the requisite high efficiency performance standards listed in Part 4 of this Agreement are deemed ineligible for cash in lieu of water rights rebate. Should this provision be activated, a CILWR rebate amount will be determined based upon those high efficiency fixtures contained in Part 4 of this Agreement that are verified to have been installed. Cash-In-Lieu of Water Rights Agreement with GRAF APARTMENTS Page 4 of 6 11. Maintenance and Replacement of High Efficiency Fixtures GRAF APARTMENTS agrees to maintain all approved high efficiency fixtures for the life of the fixtures. Replacements must at a minimum meet the same efficiency performance standards. The City reserves the right to verify approved fixtures are in place at any time over the life of this Agreement. 12. Modification or Alterations No modifications or amendments of this Agreement shall be valid unless evidenced by a writing signed by the parties hereto. 13. No Assignment It is expressly agreed that GRAF APARTMENTS shall not assign this Agreement in whole, or in part, without prior written consent of the City. 14. Successors This Agreement shall be binding upon, and inure to the benefit of, and be enforceable by the parties hereto and their respective heirs, successors and assigns. 15. Notice All notices, requests, or other communication to any party hereunder shall be in writing and sufficient if personally delivered, or by facsimile or email (with confirmation of receipt), or by registered or certified mail, postage prepaid, return receipt requested addressed as follows: GRAF APARTMENTS LLC CITY OF BOZEMAN Attn: Will Ralph Attn: Griffin Nielsen wralpha.blackridaeco.com gnielsenambozeman.net 1735 S 19"'Ave, Ste B PO Box 1230 Bozeman, MT 59718 Bozeman, MT 59771 16. Entire Agreement This Agreement embodies and constitutes the entire understanding between the parties with respect to the transaction contemplated herein, and all prior or contemporaneous negotiations, communications, conversations, understandings and agreements between the parties, oral or written,are merged into this Agreement. 17. Term of Agreement This Agreement remains active and will survive until final occupancy is granted by the City for all buildings shown upon the approved master site plan for the Project; and likewise this Agreement will expire upon final occupancy being granted by the City for all buildings shown upon the approved master site plan for the Project. 18. Termination In the event of termination pursuant to noncompliance with Section 19, GRAF APARTMENTS is entitled to CILWR rebate only for those buildings GRAF APARTMENTS has received a grant of final occupancy from the City on or before the receipt of a Notice of Termination. Cash-In-Lieu of Water Rights Agreement with GRAF APARTMENTS Page 5 of 6 19. Laws and Regulations GRAF APARTMENTS shall comply fully with all applicable state and federal laws, regulations and municipal ordinances. 20. Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of Montana. 21. Execution IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth below. GRAF APARTMENTS LLC BY (Authorized/�Signer) NAME: TITLE: 6�/ c/ :c�oi o-r acvpti..7=" DATE: 7f l`fOZ� CITY OF BOZEMAN BY: �" G NAME: SC p TITLE: 1 4 1 yr k 0-. DATE: 2 I Cash-In-Lieu of Water Rights Agreement with GRAF APARTMENTS Page 6 of 6