Staff recommends the City Council approve the Purchase Agreement, Warranty Deed, and Easement Agreement with Gene and Ronna Klamert for the purchase of land near Duck Creek Road for the westend water system pump station.

The future west end reservoir and water treatment plant will be supplied by an intake and pump station that will be located near the Duck Creek bridge crossing of the Yellowstone River. This land was identified as the best location for the intake and pump station by an engineering study. To accommodate the pump station and intake, the purchase of a 4 acre parcel adjacent to the river and a 14.82 acre parcel located on the river bottom is requested. The river bottom parcel is needed for the construction of the river intake. A 50-foot wide pipeline easement (0.23 acres total) is also requested to allow a corridor for the pipeline leaving the pump station. The appraisal performed by Thomas Appraisal Services, Inc. determined that the value of the 4 acre parcel is $11,250/acre, value of the river bottom parcel is $0/acre, and value of the easement is $10,173.91/AC. Mr. Klamert originally wanted over $25,000/acre based on his previous purchase of the property. Per the city's procurement policy, staff is authorized to offer 5% over the appraised value.  Through staff negotiation, he is willing to accept a purchase price of $49,707.00 for the 4 acre parcel and 0.23 acre easement which is 5% over the appraised value. The 14.82 acre river bottom parcel will be purchased at no cost.

Changes to purchase agreement and easement agreement were made since the January 11th, 2021 City Council meeting. None of these changes affect the purchase price. These changes are as follows:

• Specifying a fence between the purchased tract and his property. A fence is required for our facility protection anyway and is planned to be done as part of the intake construction project.
• Specifying a timeline for which rip rap needs to be installed at the water intake site (prior to spring runoff of 2023). This will be met according to the project schedule.
• Changes to some language regarding property damage in the event we need to access the pipeline easement during the growing season. Mr. Klamert would be reimbursed for crop damage and topsoil replacement. Crop value is determined by the local market price per ton or bushel at the time of damage. Access to this easement will be a rare event. Currently, no valves or fittings are planned to be installed on the length of the 420' easement.

 

City Council may:

• Approve the purchase agreement, warranty deed and easement agreement with Gene and Ronna Klamert, or;  
• Disapprove the purchase agreement, warranty deed, and easement agreement for the Klamert property. If the land is not purchased, the intake cannot be constructed and an alternate source of water would need to be developed for the west end plant.

The cost of the land and easement is $49,707, which will be paid out of water funds budged in FY21.