HomeMy WebLinkAboutF-2.1 Extension of Water Supply Agreement with IBY Property Owner LLCINFORMATIONAL ITEM F-2
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: TIKAN SINGH, GENERAL MANAGER
DATE: JUNE 26, 2023
SUBJECT: EXTENSION OF WATER SUPPLY AGREEMENT WITH IBY PROPERTY
OWNER LLC
BACKGROUND:
Pursuant to provisions of the Second Extended Term of the Amended and Restated Water Supply
Agreement between Miller Coors and the City of Azusa dated February 23, 2009, IBY Property
Owner LLC has exercised its right to extend the term of the Agreement by five years until May
31, 2028.
The Second Extended Term Agreement was from June 1, 2018 to May 31, 2023. The Third
Extended Term Agreement will be from June 1, 2023 until May 31, 2028.
RECOMMENDATION:
Staff recommends the Utility Board take the following action:
1)Receive and file the IBY LLC request to enter into third Extended Term of Amended
and Restated Water Supply Agreement between IBY LLC and Azusa.
2)Receive and file Staff’s letter acknowledging IBY LLC written notice to enter into
the third Extended Term.
ANALYSIS:
The City entered into a Water Supply Agreement (WSA) with Miller Brewing Company in 2002,
in 2004 the WSA was assigned to Miller Breweries West, L.P. (Miller) with the City’s consent.
In general, the Water Supply Agreement provided the delivery of water to Miler from the
Canyon Basin by the Bity, at certain rates, and the City, in turn, have the use of Miller’s water
rights. The Agreement was amended and restated on February 23, 2009, to continue water
supply to MillerCoors through May 31, 2013, and provide MillerCoors the options to extend the
term of the agreement three times in increments of Five-Years for each extended term. The first
Approved
Utility Board
06/26/2023
Water Supply Agreement IBY Extension
June 26, 2023
Page 2
extension was made in October 2013 by MillerCoors with an extension until May 31, 2018. The
second extension was made from June 1, 2018 to May 31, 2023.
As provided in Section 7.2 of the Agreement, IBY Property Owner LLC, a successor-in-interest
to MillerCoors LLC expressed their intent and notice to enter into the third Extended Term of the
Water Supply Agreement in a letter dated May 23, 2023. Staff has prepared an
acknowledgement letter in response to IBY Property Owner LLC written notice, which will
extend the agreement five more years, from June 1, 2023 to May 31, 2028.
FISCAL IMPACT:
There is no fiscal impact associated with the extension of the terms of the Agreement.
Prepared by: Reviewed and Approved:
Melissa Barbosa, PE Tikan Singh
Assistant General Manager General Manager
Water Operations
Reviewed and Approved:
Sergio Gonzalez
City Manager
Attachments:
1) IBY Property Owner LLC written notice of Extension of the Amended and Restated
Water Supply Agreement
2) Azusa Light & Water’s acknowledgment Letter