Approve amendment to extend the term of the easement agreement between the County of Yolo and James Fitzgerald Kelly and T. Ross Kelly on County Road 28H to December 31, 2024 for the construction, maintenance and operation of a substation and overhead electric power lines and authorize the Director of the Division of Integrated Waste Management to execute the easement and amendment. (No general fund impact) (Lindbo/Juhler)

James Fitzgerald Kelly and T. Ross Kelly (Owners) own several parcels located on County Road 28H identified as APN 042-100-013, 042-100-015, and 042-100-016. In September 1992, the Owners granted a 31-year easement via an easement agreement across a portion of their property for, among other things, the construction, maintenance and operation of a substation and overhead electric power lines beginning at County Road 28H and County Road 102 and continuing down County Road 28H. The power lines and substation carry electricity produced at the Yolo County Central Landfill and sold and distributed to SMUD (Easement).  MM Yolo Power, LLC acquired the electric power lines and substation in approximately 1999 and entered into an amendment of the Easement agreement with the Owners addressing the compensation to be paid to the Owners during the term of the Easement, which includes a $6,000 annual base payment ($3,000 to each owner), plus a CPI adjustment.

In 2016, the County acquired substantially all of MM Yolo Power, LLC's gas production assets, which include rights to the Easement, which the County uses to sell and distribute electricity to SMUD. The County has made the annual payments required by the Easement agreement to the Owners since 2016. The annual payment in 2022 was $10,267 ($5,134 to each Owner). 

In early 2023 the County began the initial stages of negotiations to purchase the Easement permanently from the Kelly brothers to reduce the ongoing cost to the County, and its rate payers, of keeping the easement (yearly payment for access to Easement). The original agreement expired on September 15, 2023. Since we are still in the initial stages of the negotiation process to acquire these parcels, the County wishes to extend the term of the Easement agreement to December 31, 2024 to allow sufficient time for dialogue and further negotiation with the Owners.  The Owners have approved the 2023 Amendment (Attachment A), which has an effective date of September 15, 2023 and would extend the term of the Easement to December 31, 2024. The County would continue to make the annual payments to the Owners in 2023 and 2024.  The 2023 annual payment will be $10,925 and the 2024 annual payment is estimated to be $11,400 with the CPI adjustment.

CMD West and County Counsel were consulted during this process.

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