Staff recommends that council grant an easement to Northwestern Energy for the installation of a power line.

The City previously granted Northwestern Energy (NWE) an easement to install a power line in the vacant land north of the Shiloh Conservation Area. NWE has determined that they need another power line through the same area.   The area where the power lines are located is not being used by the City and there are no plans to use it in the future.  One of the conditions of granting the easement is that NWE will maintain the area instead of the City.  

City Council may:

• Approve the easement, or;
• Disapprove the easement.  If the easement is not approved, NWE will need to find an alternate location for the power lines.

Northwestern Energy provided a valuation of the land based on comparable land sales in the area (see attached letters).  Their evaluation established a value of $10,000/acre for similar land. They reduced the value to $3,000/acre based on the fact that this land does not have services and would require extensive work to develop. The total land included in the easement is 0.55 acres so the value proposed by NWE is $1,650. Also, they are agreeing to maintain the parcel which has a value to the city. 

City staff hired an appraiser to review the offer from NWE.  While the appraiser did not do a full appraisal, his opinion was that the value of the land should be closer to $7,125 per acre resulting in a value of $3,926 for the 0.55 acre easement.  The appraiser was only asked to look at land value and so his opinion did not consider the maintenance aspect.  Staff has estimated that the cost of maintaining the area is approximately $800 to $900 per year.  Given the value of the maintenance, the city staff does agree that $1,650 for the 0.55 acres is a fair offer for the use of the land.