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tervi[[e T.,..;ta6t1sfic({ 1857 1880 '.Main Street, Centeroiffe, !M:N 55038 651-429-3232 or 'Fa.J(651-429-8629 February 14, 2006 Memo to: SPRWS Board of Directors Thank you for giving us the opportunity to present you with an alternative purchase arrangement that would aIlow CenterviIle to make one last attempt to secure grant funds to assist with the purchase of the parcel ofIand adjoining your pumping station on Centerville Lake. CenterviIle wishes to purchase the entire property, but we cannot be bound to the entire purchase at this time and still be eligible for grant funds. Prior to this discussion, we were set to execute the purchase agreement for the entire property at a cost of $536,000 with payments broken down to one third at closing, a third payment after one year and the remaining third after two years. The second payment would likely have been programmed for about March of 2007, and final payment in March of2008. We propose that the City and SPRWS enter into a purchase agreement as soon as possible to complete the purchase of approximately one-third of the property at the cost of $178,668. Secondly, we would execute a purchase option on the remaining portion with a price of$357,332. We would pay $10,000 for the option which would be applied to the purchase price if the option is exercised. The option term would be for six months, but would allow a six month extension if we are funded by DNR grants. If no grant were approved, the option would allow the City to enter into a purchase agreement to buy the remaining portion at a price of$357,332 to be paid in two instaIlments roughly corresponding in amount and timing, to the two remaining payments for 2007 and 2008 that we had originally programmed in the first purchase plan. To show our good faith, we would execute a buy-back option to SPRWS on the first parcel at a price of $100,000 that you could execute if the City's option expires without the City executing the purchase. We will continue as previously agreed with the demolition of the home on the first parcel. In the worst case scenario, SPRWS would buy back the property we first purchased at $100,000, which is a $78,000 discount from our purchase. In addition we wiII have removed the dwelling and will have forfeited a $10,000 option money. Even if that unlikely event happened, it is quite likely you would find another buyer willing to pay your original appraised value, that together with our forfeited amounts would leave you financially better off than if the City would have purchased the land outright. Dallas Larson, City Administrator