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Council approves easement agreement and long-term payments to secure site for tank replacement; CEQA notice filed
Summary
The council unanimously adopted Resolution 1257 authorizing the city manager to execute an easement agreement with the McClure trust to secure land for replacing an aging water tank, approving payment terms that include a $65,000 escrow payment, 40 annual $6,000 installments (3.2% annual increase), and a total eventual payment estimate of $879,685; staff also prepared a CEQA notice of exemption under section 15301.
The Blue Lake City Council unanimously adopted Resolution 1257 on April 7, 2026, authorizing the city manager to execute an easement agreement with the McClure trust to secure property needed to replace an aging water tank and directing the city clerk to file a Notice of Exemption under CEQA.
City staff described a multi-part financial arrangement to acquire the easement. "The payments that'll actually be made to the McClure trust is, 65,000 through the escrow process. 60,000 of that is the actual purchase amount, and the intention of that is to cover all of the years of rent that we haven't paid since the previous lease expired to now," the staff member said. Staff said $60,000 will be paid in two parts (a $5,000 deposit on opening escrow and $55,000 before close), plus $5,000 to reimburse attorney's fees.
In addition to purchase and fee payments, staff said the city agreed to make a $6,000 payment that is the first of 40 annual payments, each to be increased annually by 3.2 percent. "That $6,000 payment is the 1st of 40 annual payments that we will make. And every year, that $6,000 will be increased by 3.2% to cover for inflation," the staff member said, and staff calculated the 40-year payment stream at $473,481.
Staff also summarized water-related concessions tied to the agreement: continued noncharging for four accounts (valued at $88,704 at current monthly base rates over 40 years) and an annual free-water allocation of 300,000 cubic feet (valued at $1.90 per cubic foot, $228,000 by staff estimate). "So the total of what will eventually get paid to her is $879,685," the staff member said.
The staff member told council the city had prepared a Notice of Exemption and recommended a CEQA finding that the project is exempt under section 15301 for existing facilities; staff said they would file the NOE with the county clerk and submit the package to the state clearinghouse because federal funding is involved.
Council members asked clarifying questions about the annual budget impact (one council member noted a roughly $21,000 to $22,000 per-year budget effect), FEMA funding for replacement of the preferred tank and the condition of the two tanks; staff confirmed FEMA funds are available for replacement and said tank 1 is leaking more significantly than tank 2. After questions, Council member Louis Lusso moved to adopt the resolution, a council member seconded, and the council approved the motion by roll-call vote with all members voting "Aye."
