To: Honorable Mayor and Members of Town Council
From: Mark Marlowe, P.E., Utilities Director
Matt Benak, P.E., Water Resources
Title
Resolution Authorizing the Extension of the Option Term and Option Payment Regarding the Box Elder Creek Acquisition
Body
________________________________________________________________________________
Executive Summary
On September 6, 2016, Town Council approved of an amendment to the Option Agreement and Joint Escrow Instructions between Town of Castle Rock Water Enterprise and Box Elder Creek Properties, LLC (see Attachment B). This amendment postponed the price increase on the take down option for the Box Elder property from October 1, 2016, to December 1, 2016 but it did not postpone the option payment. The option payment due is $300,000. Both parties agreed to postpone the date of the price increase because the Town is currently performing due diligence activities on other water rights that would be used to augment out of priority depletions from wells located on the Box Elder property. The purpose of this resolution is authorizing the $300,000 payment to Box Elder Creek Properties, LLC. If the water rights currently under contract prove to be adequate for the Box Elder project, staff will likely recommend closing the option on the Box Elder well field before December 1st to take advantage of the potential $1.1 million in savings. For this reason, staff recommends paying this option payment which does, of course, go towards the purchase price of the well field.
Budget Impact
The total budget impact for this option payment is $300,000. There are adequate funds in account 211-4375-443-77.30 WRCBOP to make this payment.
Staff Recommendation
Staff recommends Town Council approve the resolution authorizing the 2016 payment in the amount of $300,000 to Box Elder Creek Properties, LLC.
Proposed Motion
“I move to approve the resolution as introduced by title.”
Attachments
Attachment A: Resolution
Attachment B: Resolution 2016-81