Minutes - 2008 - City Council - 07/10/2008 - Special
Eagle City Council
Special Meeting Minutes
July 10,2008
The meeting was originally to take place in the Liberty Room,
but was moved to Council Chambers.
1. CALL TO ORDER: Called to order 9:12 a.m.
2. ROLL CALL: Present: GUERBER, SHOUSHTARIAN, HUFFAKER, SEMANKO.
3. EXECUTIVE SESSION:
A. Acquisition of private property. I.C. S 67-2345 (c)
Guerber moves to go into executive session per Idaho State code 67-2345 (c) to discuss
acquisition. Seconded by Shoushtarian. Discussion.
Guerber withdraws the motion.
4. NEW BUSINESS:
A. Consideration of Eae:le Water intertie ae:reement.
Mayor Bandy introduces the item.
Semanko states that Eagle Water Company is requesting an intertie into the City of Eagle's water
system. A City system that has been built by the City, on the backs of the taxpayers of the City,
and anyone who wants to hook up to that needs to be charged a reasonable amount for that,
because if they aren't then it's being subsidized and borne by the taxpayers of the City of Eagle.
What would adequate monetary consideration for anyone to hook onto the City water system for
redundant fire flow protection capacity and nothing else, what is that worth?
City Engineer, Vem Brewer after analysis by the City Engineer the calculation is comprised of
two parts for the concurrent reserve, fire reserve and such that it takes to run the tank. It was
$6,700 per month to do the construction portion of that. To put the system behind it, that
actually fills it, and runs it, so that it is actually an available system was $9,400 per month. So in
the total picture it was $16,100 would represent a cost of the storage that would fairly distribute
the benefits of that storage facility.
Mayor Bandy relays how the calculations were arrived at for further clarification to Council
member Semanko's inquiry. The numbers were based on the Eagle City connection base of
1400 connections and the Eagle Water connection base of 3400 connections. The ratio there is
29% to 71 % , and what calculations were provided by City Engineer Kasey Ketterling at a
previous meeting, was that of the available water that 63% of that water is for fire flow. So we
took the 63% times the 71 % and came out with 0.45, so we took that 0.45 multiplied it by
$179,000 (which is the debt payment) and that came out to $80,550 per year, and to divide that
by a monthly cost is comes out to $6,700. So that is strictly the fire flow component of this.
And then for the operation and maintenance (O/M) aspect and the calculation was on an annual
basis there would be $250,000 for O/M costs for 2 wells and a reservoir, and again we multiplied
the $250,000 times 0.45 factor and that gave us a $112,500 a year O/M; divide that by 12
(months) that gives us $9,400; adding the $6,700 for the fire flow to the $9,400 for operation and
Page 1 of3
K:\COUNCIL\MINUTES\Temporary Minutes Work Area\CC-07-10-08spmin.doc
maintenance that gives us the $16,100 per month total cost. This is basically dividing up
assessed benefits.
Discussion regarding the calculations, the proposed conditions in the draft intertie agreement,
and what conditions would and would not be beneficial to the City of Eagle.
Molly O'Leary, with Richarson and O'Leary, attorney for Eagle Water Company. O'Leary
appreciates the time and effort that has been invested in trying to create an agreement that would
benefit both parties. Discussion regarding conditions ofthe agreement including water right
leasing, right to first refusal and DEQ conditions.
Robert DeShazio, owner of Eagle Water Company, comments on the terms of the agreement and
the efforts being made to address the uranium issue. He could tie his system into a system other
than Eagle's, but he would rather work with the City in this matter. Discussion.
Discussion regarding water rights, and conditions of the agreement. Semanko comments that
there was once a purchase and sale agreement and it is gone. All we are talking about now is the
right of first refusal, and the notion that Mr. DeShazio may never sell it - but if you do, the fact
that the City would have a meaningful opportunity to buy it and the folks would get a chance to
vote. And then if they don't buy, you (DeShazio) would sell it to someone else - that is worth a
lot to the City, in Semanko's view. It would also allow the City to look at bringing the price
down quite a bit on the monthly and give us justification on, if we have to defend it in court.
Guerber moves to go into executive session per Idaho State Code 67-2345 (c) acquisition of
private property in regard to negotiations with Eagle Water Company intertie agreement.
Seconded by Huffaker. HUFFAKER AYE; SHOUSHT ARIAN AYE; GUERBER AYE;
SEMANKOAYE. ALL AYE...
Council enters executive session.
Council goes into executive session to discuss negotiations with Eagle Water Company intertie
agreement.
Council leaves executive session.
Huffaker present via tele-conference upon exit of exit of executive session.
Semanko moves to authorize the mayor to sign an agreement to include a $10,000 month
payment from Eagle Water to the City for the intertie agreement for the amount of time
that Eagle Water Company needs the intertie including as necessary a month to month
extension, words to be drafted by (legal) counsel. Also to include a permanent lease option
and a permanent right of first refusal, again words to be worked out by (legal) counsel on
both sides, and we authorize the Mayor to sign the agreement once it is ready for signature.
Also agree that the City would agree with Eagle Water Company with regard to
authorizations necessary for the PUC in dealing with this arrangement. (discussion - both
legal counsels and City Council) The changes made the agreement shall be e-mailed out to
the Council members as to form, etcetera and make sure they are all on the same page. But
we do not need to come back into session that the Mayor would be authorized to sign the
Page 2 of3
KICQUNCILIMINUTESITemporary Minutes Work AreaICC-07-10-08spmin.doc
agreement. Seconded by Guerber. Discussion. HUFFAKER AYE; SHOUSHT ARIAN
AYE; GUERBER AYE; SEMANKO A YE...l\fOTION CARRIES.
5. ADJOURNMENT:
Guerber moves to adjourn at 11:20 a.m. Seconded by Semanko. ALL AYE...MOTION
CARRRIES.
Hearing no further business, the Council meeting adjourned at 11 :20 a.m.
Respectfully submitted:
. M:, Mk9- ~G,,~ ,",......""
to"'" G \,.E III",
~fJj ~t-: ......... lit "',
- SHARbN K. BERGMANN ~ ~ ~ 'tE.. ..
CITY CLERK/TREASURER ~ .. to .. 0:.
I 0 I o~ ?\ 0 ~
: >- 4, , !.\ % :
= f-o t '" · ~ 0: < :
:.... 0 , ~ ~. Q .
\ t,) \V c,. ~~l.... =
~ 'lo.. ~ ~
~ ..,NCO.... 0 ~
~~ lit ........ ~ ~~~
~###" ST p.. t{",,~~
,,'.........'
A TRANSCRIBABLE RECORD OF THIS MEETING IS A V AILABLE AT EAGLE CITY
HALL
Page 3 of3
K:\CQUNCIL\MINUTES\Temporary Minutes Work Area\CC-07-10-08spmin.doc