To: Honorable Mayor and Members of Town Council
From: Mark Marlowe, P.E., Utilities Director
Matt Benak, P.E., Water Resources Manager
Title
Resolution Approving the First Amendment to Option Agreement and Joint Escrow Instructions between the Town of Castle Rock and Box Elder Creek Properties, LLC
Body
________________________________________________________________________________
Executive Summary
The purpose of this memo is to request Council approval of an amendment to the Option Agreement and Joint Escrow Instructions between Town of Castle Rock Water Enterprise and Box Elder Creek Properties, LLC. The amendment postpones the price increase on the take down option for the Box Elder property from October 1, 2016, to December 1, 2016. Now, if Castle Rock takes down the option by December 1, the cost will be $8.3 million. After December 1, 2016, the cost goes up to $9.4 million. 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. Assuming that the water rights are ultimately purchase, Castle Rock staff will likely recommend taking down the option on the well field.
Budget Impact
There is no budget impact associated with amending the option agreement to postpone the date of the next price increase, unless Castle Rock takes down the option before December 1, which would save the Town $1.1 million.
Staff Recommendation
Staff recommends Town Council approve the First Amendment to Option Agreement and Joint Escrow Instructions as provided in Exhibit 1 of Attachment A.
Proposed Motion
“I move to approve the resolution as introduced by title.”
Attachments
Attachment A: Resolution
Exhibit 1: Amendment