O-1998-2234 - Laserfiche WebLink

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e e La Porte Area Water Authority Interoffice Memorandum To: From: LPAWA Board Members Robert T. Herrera, General Manager Steve Gillett, Director of Public Works ~itchfield, Director of Finance D April 22, 1998 Date: Subject: Water Capacity Sale and Purchase Agreement As discussed at the Water Authority meeting of March18, 1998, staff was still in negotiations with the other parties to the Water Capacity Sale and Purchase Agreement trying to arrive at an agreement that we felt comfortable presenting to you. After several more discussion, Mr. Herrera requested a face to face meeting with all parties involved. On Friday, April1ih, a meeting was held, via a conference call, with about 15 parties involved in the process. As a result of that meeting, we have reached an agreement that we feel comfortable presenting to you. In addition to the agreement, it is equally important that we discuss the various financing options that are available to the Authority. Before going any further, let me reiterate the importance of this project. This is a commitment of almost $3.5 million dollars to purchase 3 million gallons of water capacity for use by the three member cities. As we have shared with you in the past, this water is vital to the continued growth of the member cities. Currently, Shoreacres and Morgan's Point are at their current allotment while La Porte is at about 80% of theirs. As shared with you at the last meeting, the impact of this purchase on La Porte is to provide water for the next 20 to 40 years. Water Capacity Sale and Purchase Agreement As verbally discussed at the last meeting, we were very displeased in the offer being made by the Gulf Coast Water Authority and City of Galveston (hereinafter referred to collectively as Gulf Coast). In essence, Gulf Coast wanted us to agree to put $500,000 down, pay $500,000 every six months into an escrow until funding was completed. If for any reason the Authority was unable to complete the funding of the escrow, then the Authority forfeited all funds they had placed into escrow and received no capacity. The instructions we received from the Board was to move forward with negotiations to secure us a favorable agreement while remembering the water purchase is very important to our future, so do not do anything that would jeopardize the agreement.