HomeMy WebLinkAbout8 Aqcuisition of Donner Lake Water System Agenda Item # 8
�u TRUCKEE DONNER
Publice-4- Utility District
Memorandum
To: Board of Directors
From: Peter Holzmeister
Date: April 27, 2001
Funding for acquisition of Donner Lake water system
If the Board approves the Resolution of Necessity to acquire the Donner Lake water
system by eminent domain, we would ask the court to give us immediate posession.
This, in turn, requires us to deposit with the court the amount of money we believe is fair
compensation. We believe, based on the appraisal we conducted, that fair compensation
is$500,000.
Eventually the cost of acquisition will be rolled into the long-term financing of the water
system. However, we do not yet have the long-term financing arranged. Therefore, I
suggest that we borrow $500,000 on a temporary short-term basis from the Electric
Building Fund. That restricted fund currently has a balance of$1,450,000, and it will not
be needed for any other purpose during the next year.
If the Board approves this recommendation, I would suggest that the Donner Lake water
system pay interest at the LAIF rate, about 6.0% per annum, for the term of the loan.
This would be set up as a formal interfund loan
Recommendation
I recommend that the Board take the following action:
Authorize the deposit of$500,000 with the filing of the eminent domain action in Nevada
County Superior Court, and
Establish an inter-fund loan of $500,000 from the Electric Bulding Fund to the Donner
Lake Water System, said loan to be paid off at the time long-term financng is arranged
and paying an interest rate based on the LAIF rate during the term of the loan.