City Council Minutes 2003 01 21 - Laserfiche WebLink

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Louisville City Council Meeting January 21, 2003 Page 12 Sisk voiced his satisfaction with the explanation offered by Mayor Davidson. MOTION: Davidson moved that Council proceed with $12.5 million dollars in bonding using the Water Authority, as directed by Staff and the Water Committee, seconded by Brown. All in favor. Laus stated she would begin the application process. Public Works Tom Phare reviewed the agreement for purchase and sale of 150 acre-foot units of Northern Colorado Water Conservancy District for $1,931,250. The agreement requires the entire purchase amount to be escrowed by Friday, January 24, 2003. The sum of $10,000 represents earnest money. He stated the purchase would increase the City's current holdings by 15% or 1,200 plus units. The agreement authorizes the Mayor and the City Attorney to negotiate non-substantial changes. Simmons noted if the agreement were approved, Staff would bring forward a budget amendment and supplemental budget appropriations. Sisk asked Phare if the units are being sold through a water broker and if only the 150- acre foot units are available. Phare confirmed the units are being sold through a water broker and only the 150-acre foot units are available. Sisk asked if the First National Bank of Fort Collins has a security interest in this property. Phare explained the farm is closing on Friday, January 24, and the water rights will be conveyed to the City. He stated the water rights are temporary collateral for financing purposes. Sisk asked for clarification on the $1.9 million dollars payment on Friday. Phare stated the proceeds of the sale would not be distributed to the seller until the Northern Colorado Water Conservancy District approves the transaction. Sisk asked about the interest between the closing date of January 24 and March 15. City Attorney Light stated the interest is returned to the City at closing because all of the closing costs are escrowed upfront. He noted the escrow agent would hold the complete escrow of the purchase price for the benefit of the purchaser and the seller only. He explained it could not be used for the sell of the farm and the First National Bank of Fort Collins would take a security interest in the short term, to lend money to buy the water rights on Friday, January 24, 2003. He stated the City's protection is in Section 8, of the contract, that all the security interest has to be released to the City's satisfaction before final closing. Sisk asked if Light was satisfied with the provisions of the contract. Light confirmed he was satisfied with the contract and stated if the farm does not close, the money would be returned to the City. 12