Per the 2006 Water Master Plan, Zone 3 of the City's water distribution system has a deficient amount of water storage. The only feasible option to resolve the immediate deficiency problem in Zone 3 is to construct a new west-end reservoir. After extensive investigation into multiple potential locations, it has been determined that a parcel adjacent to the existing Chapple Reservoir is the best location for the new tank. The parcel for the new tank is part of a larger tract owned by Sheldon Eaton, Eaton Land Development.

An appraisal was obtained and an informal offer was made in March, 2011. Negotiations took place over the next 6-9 months in which various alternatives were pursued. No mutual agreement could be reached, so the original appraisal was updated and revised to reflect the current values of two options: 1) purchase of the originally requested 3.55 acres; or 2) purchase of 2.56 acres and an additional 1.5 acres of temporary construction easement. The revised appraisal was received July 2, 2012, and a letter with a formal offer was sent to Mr. Eaton on July 9. The letter gave an acceptance deadline of July 31 and notice that if declination or no response was received by that date, City Staff would pursue right of entry via Eminent Domain. No response has been received, so Council is now being asked to pass a resolution allowing Staff to begin Eminent Domain proceedings and obtain right of entry to the land depicted in option 2 of the offer made to Mr. Eaton.

Council voted on August 13 to delay action on this item until the September 10 meeting.  This would provide Mr. Eaton additional time to gather information and potentially reach an agreement with Staff.

The Council may:

• Approve the passage of a resolution allowing City Staff to begin Eminent Domain proceedings to obtain right of entry to the land needed to construct a new Zone 3 Reservoir; or
• Do not approve such a resolution, which will further delay the project and the ability to supply Zone 3 with additional water storage needed to meet current and future needs.

There is no financial impact to passing a resolution allowing City Staff to begin Eminent Domain proceedings. Ultimately, if Eminent Domain is followed to its full extent, the value paid for the land will be determined by mediation, arbitration or the court and authorization to spend funds for the land purchase will be requested in a separate Council meeting agenda item.

Multiple locations in west and northwest Billings were investigated as potential sites for a new Zone 3 Reservoir.  A 3.55 acre piece of land, immediately west of the existing Chapple Reservoir located on City-owned land, was determined to be the best option.  The desired land is owned by Sheldon Eaton, Eaton Land Development.

An appraisal for this land was obtained in February, 2011, and an informal offer was made to Mr. Eaton in March.  Mr. Eaton did not agree with the appraised value or with the size of the parcel being requested, so negotiations began in an attempt to reach a mutual agreement for acquisition of the needed land.  After looking into many alternatives of reducing the size of the parcel, repositioning the proposed tank location, determining what Mr. Eaton's park donation may be if/when his remaining land is developed, etc, still no agreement could be reached.

Staff determined the smallest parcel feasible to achieve the needs of this project would be 2.56 acres, with an additional 1.5 acres used as a temporary construction easement.  A revised appraisal was obtained to reflect the values of the two options: 1) purchase of originally requested 3.55 acres; or 2) purchase of 2.56 acres and additional 1.5 acres of temporary construction easement.

A formal offer was made to Mr. Eaton with these two options, but the offer has not been accepted.  Given the necessity the City is faced with to construct a new reservoir in a timely manner to meet Zone 3's current and immediate future storage needs, Staff would like to obtain right of entry via Eminent Domain.  Council is requested to pass a resolution allowing Staff to begin such Eminent Domain proceedings.

There is insufficient water storage capacity in the City's Zone 3 water pressure zone.  To alleviate this deficiency, a new reservoir must be constructed, and additional land must be acquired to build the tank on.  An appraisal has been obtained and a formal offer made to purchase the necessary land, but the offer has not been accepted.  Council is therefore requested to pass a resolution allowing Staff to begin Eminent Domain proceedings to gain right of entry, allowing the project to continue.