To: Honorable Mayor and Members of Town Council
From: Mark Marlowe, P.E., Director of Castle Rock Water
Matt Benak, P.E., Water Resources Manager
Kurtis Cotton, P.E., Water Resources Program Analyst
Title
Resolution Ratifying the First Amended Contract for Purchase and Sale of Water Rights Between the Town of Castle Rock and PV, LLC and the First Amendment to Contract for Purchase and Sale of Water Line Capacity Between the Town of Castle Rock and Pioneer Metropolitan District No. 3 (Ratifying time extension for water right purchases)
Body
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Executive Summary
The purpose of this memorandum is to request Town Council approval of the Resolution (Attachment A) Ratifying the First Amended Contract for Purchase and Sale of Water Rights Between the Town of Castle Rock and PV, LLC (Exhibit 1) and the First Amendment to Contract for Purchase and Sale of Water Line Capacity Between the Town of Castle Rock and Pioneer Metropolitan District No. 3 (Exhibit 2). These two contracts are intended to close concurrently and were scheduled to close on Monday, February 13, 2017. The attached amendments will extend the closing date to within thirty days after the earlier of: 1) The Colorado Groundwater Commission’s issuance of amended final permits; or 2) May 15, 2017. The Town Manager has signed both amendments, and staff recommends that Town Council ratify these contracts to postpone the closing date.
Discussion
On August 16, 2016, Town Council approved Resolution 2016-079 Approving the Contract for Purchase and Sale of PV, LLC Water Rights (Attachment B) and Resolution 2016-080 Approving the Execution of the Purchase and Sale for Water Line Capacity from Pioneer Metropolitan District No. 3 (Attachment C). Town staff together with engineering consultants and legal consultants have been conducting due diligence on these purchases since August of 2016. All issues identified have been resolved with the exception of the issuance of final permits for the seven wells that are being purchased under the purchase and sale of PV, LLC Water Rights agreement. These wells were decreed for export without limitation on place of use in Case No. 99CV0097, however, the Colorado Groundwater Commission is verifying that the place of use should not be limited prior to issuing the final permits.
Out of an abundance of caution it is desired to amend the contracts to extend the closing date to within thirty days after the earlier of: 1) The Colorado Groundwater Commission’s issuance of amended final permits; or 2) May 15, 2017. If the commission fails to issue permits containing no limitation on the place of use of the groundwater once exported from the Lost Creek Designated Groundwater Basin or a place of use acceptable to Castle Rock by May 15, 2017, Castle Rock may terminate both of the agreements.
Staff Recommendation
Staff recommends Town Council approve the First Amended Contract for Purchase and Sale of Water Rights and the First Amendment to Contract for Purchase and Sale of Water Line Capacity.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
Attachments
Attachment A: Resolution
Exhibit 1: PV Contract Amendment
Exhibit 2: Pioneer Contract Amendment
Attachment B: Resolution 2016-079
Attachment C: Resolution 2016-080