As part of W.O. 08-25, the Zone 3 Chapple Reservoir Expansion project, it was necessary to condemn 2.56 acres of land on which to construct a new water reservoir.  Council approved the Resolution of Condemnation on July 23, 2012.  The land owner, Eaton Land Development (Eaton), was ultimately served with the Complaint for Condemnation on February 14, 2013.  Due to the inability to agree on the fair market value of the land being taken and an additional 1.5 acre temporary construction easement, and to avoid having to incur the time and expense of a formal condemnation hearing, both parties agreed to enter into arbitration.  The Arbitration Agreement stated an independent third party would determine the final costs to be paid by the City to Eaton.  Final costs will also include interest to which the owner is statutorily entitled.  Council is asked to approve payment of the costs determined by the Arbitrator.  As of the Council memo deadline, a ruling had not yet been received from the Arbitrator, so these results will be presented at the Council meeting.

The Council may:

• Approve payment of the value rendered by the Arbitrator, as presented at the Council meeting; or
• Council may disapprove payment.  If the Council does not approve the amount, the City's Legal Department would need to review options for appeal of the value.  Also, the construction of the reservoir will be delayed.

The Arbitrator will rule that the fair market value of property and easement in question, as of February 14, 2013 (date of summons to the owner), was a value that will be presented at the Council meeting.  The City will pay to Eaton Land Development the total of the market value and easement in addition to the interest since the date of the summons for the 2.56 acres on which to construct a new water reservoir and the associated 1.5 acre temporary construction easement.  Funds will be taken from the project budget, which includes an adequate allowance for land acquisition.  The Arbitrator ruling had not been received by the Council memo deadline, so the final amounts will be presented at the Council meeting.

Final payment amount will be presented at the Council meeting.  Staff recommends that the City Council approve this payment amount to Eaton Land Development for the acquisition of 2.56 acres of land on which to construct a new Zone 3 water reservoir and the associated 1.5 acre temporary construction easement.