In July of 2018, the City of Sparks entered into a development agreement for the development of a parcel of land (APN 083-011-15) located at 555 Highland Ranch Parkway, located north of Highland Ranch Parkway and west of Pyramid Highway (the Property) known as Five Ridges (formerly the Quarry).  The Property owners have been in the process of obtaining necessary government approvals to develop the Five Ridges development at the Property.

As part of the process, the owner of the parcel, QK, LLC, contacted the Sun Valley General Improvement District (SVGID), the Truckee Meadows Water Authority (TMWA), and City of Sparks staff regarding the possibility of having SVGID provide water service to the Property instead of TMWA.  The owner believed it would be more efficient to have SVGID provide water service because the Property is adjacent to SVGID and it would be difficult and more expensive for TMWA to expand its existing water distribution network to the Property. 

The City of Sparks and TMWA currently have an existing right-of-way agreement that allows TMWA to install, operate, and maintain its water distribution system within City of Sparks roadways, subject to the requirements and conditions placed upon TMWA in that agreement.  Given that the Property is located within Sparks city limits, the City of Sparks would require SVGID to enter into a similar right-of-way agreement that would govern SVGID’s use of City right-of-way.  

Prior to City staff negotiating with SVGID, TMWA (who is the designated water service provider for the City of Sparks) considered this issue and its Board of Directors agreed that water service can be more efficiently and effectively provided to the Property by SVGID. TMWA’s Board of Directors approved and executed an amendment to its wholesale water supply agreement to allow SVGID to provide water service to the Property.

The Property owner then petitioned SVGID for partial annexation into SVGID for the provision of water services only.  The SVGID Board of Trustees considered the partial annexation for water services only at its January 23, 2020 public meeting, and ultimately approved the partial annexation. 

The proposed right-of-way agreement between the City and SVGID is modeled after the agreement between the City and TMWA to ensure that each water provider is subject to the same terms and conditions.  It provides SVGID with the right to install, operate, and maintain its water distribution system within City roadways that will be located within the Property and the adjacent section of Highland Ranch Parkway, subject to certain requirements, including notice requirements, its compliance with the City’s permitting requirements, and the payment of right of way fees pursuant to NRS 354.59883. 

Recently, the Sparks Planning Commission approved a Conditional Use Permit for hillside development at the Property.  The City Council, at its May 26, 2020 meeting, affirmed the Planning Commission’s issuance of the Conditional Use Permit for hillside development and approved a tentative map for subdivision of the Property. 

The SVGID Board of Trustees considered this Right-of-way Agreement at its May 14, 2020 public meeting and voted unanimously to approve the Right-of-Way Agreement. 

Currently, TMWA is the sole provider of water services within the City of Sparks.  TMWA’s operation of its water transmission and distribution system within City right-of-way is governed by a right-of-way agreement that governs the terms and conditions of TMWA’s use of City right-of-way.  In negotiating the agreement with SVGID that is before the City Council, City staff sought to ensure that TMWA and SVGID are subject to the same terms and conditions, such as the payment of right of way fees to the City, location requirements, notice requirements, and other construction standards. 

However, there are two notable differences when comparing the TMWA agreement and the proposed SVGID Agreement.  First, the SVGID Agreement only applies to the subject Property (APN 083-011-15) located at 555 Highland Ranch Parkway and the adjacent portion of Highland Ranch Parkway whereas the TMWA Agreement applies to all City right-of-way.  This geographical limitation ensures that SVGID’s rights only extend to the subject Property/Five Ridges development, and that TMWA remains the designated water provider for all other locations in the City. Second, the SVGID Agreement clarifies that SVGID’s annexation of the Property was solely for the provision of water services, and therefore the City will continue to provide other governmental services and will have the right to levy and collect ad valorem property taxes on the Property, while SVGID will be barred from attempting to levy or collect any general taxes including property taxes on the Property.  This language was included to clarify each entity’s taxing authority in future years.  

City Staff recommends that the City Council approve the Right-of-way Agreement. 

1. Council could approve the Agreement with SVGID.

2. Council coud reject the Agreement and direct the City Manager to pursue further negotiations. 

I move to approve Right-of-Way Agreement (AC-5671) between the City of Sparks and SVGID to allow SVGID to install, operate, and maintain its water distribution system within City roadways that will be located within the Five Ridges development (APN 083-011-15) and the adjacent section of Highland Ranch Parkway, subject to the requirements placed on SVGID within the Agreement.