Joint Special Council/BFPD
04/1/24 06:00 PM
City Clerk / Records
Maribel Hernandez
Audit
Doc ID: 5610
AGENDA ITEM
AGENDA MATTER:
APPROVAL OF OPTION AGREEMENT BETWEEN ODESSA WATER DISTRICT AND BNSF
RAILWAY COMPANY FOR OPTION TO PURCHASE MOJAVE BASIN, CENTRO SUBBASIN UNUSED FREE PRODUCTION WATER ALLOWANCE.
EXECUTIVE SUMMARY:
DISCUSSION:
Odessa Water District owns certain water rights, approximately 299 acre-feet, in the Centro Subbasin of the Mojave Basin Area. The BNSF Railway Company asked Odessa Water District to consider the attached option agreement, by which BNSF would buy an option to use some or all of Odessa Water District’s Free Production Allowance (“FPA”) (165 acre-feet for the 2023-24 water year) and Carryover FPA from prior years, if any, in the Centro Subarea of the Mojave Basin, which Free Production Allowance and Carryover are held by Odessa, for a seven-year term beginning October 1, 2024.
Staff have analyzed the request and recommend the Board of Directors of the Odessa Water District approve the proposed option agreement, as the water for the coming years is not necessary for immediate municipal use, and as the water, if used under the option agreement, could then be used for construction needs for the Barstow International Gateway project and other railway needs.
FISCAL IMPACT:
Under the proposed option agreement, BNSF would pay $4,000 for the option agreement, then, if exercised, any water free production allowance or carryover free production allowance transferred shall be paid for at a price of $50 per acre-foot. These prices will exceed all anticipated Odessa Water District costs in these transactions, creating a net positive impact to the Odessa Water District’s enterprise fund.
RECOMMENDED ACTION:
Staff recommends the City Council approve the Option Agreement between Odessa Water District and BNSF Railway Company for Option to Purchase Mojave Basin, Centro Subbasin Unused Free Production Water Allowance.