Aldermen postpone action on wastewater services, agreement, donation agreement and development agreement until Sept. 3 deadline

Salado aldermen voted unanimously tonight to postpone action regarding the wastewater services agreement, the donation agreement, the warranty deed and the development agreement with The Sanctuary Development until Sept. 3 at which time any agreements between the Village and the developer may dissolve.

Neither the wastewater agreement nor donation agreement have been signed by Mayor Skip Blancett, even though the board of aldermen directed the mayor to execute the agreements by Aug. 20. At a special meeting on Aug. 17, aldermen voted to approve the agreements in principal with instructions for Village staff and attorneys to draft language to reflect agreements that they understood at the time of the motion to be agreed upon by both parties.

There were two provisions that aldermen wanted included in the wastewater agreement when they voted in favor of it. The board wanted language inserted into the agreement that the gravity line on Royal Street would be “paid for” through the Public Improvement District (PID) financing if it were legal to do so.  The cost for the gravity line is estimated at $600,000.

The other provision for negotiation that has not been addressed is the discharge line for the wastewater treatment plant and the proportional share in paying for the discharge line. The discharge line will carry the treated effluent from the treatment plant on the northern side of the Sanctuary to the western side of the development. The cost for the line is estimated at $500,000.

The agreements and warranty deed are also incomplete in terms of a survey of the property to be donated to the Village and an appraised value of the property.

Village attorney Leah Hayes told aldermen that they could accept the gift without having an appraisal of the property. She added that the survey was important to have to protect the interests of the Village.

The original agreements approved Aug. 17 set a Sept 3 deadline for other agreements to be reached between the Village and the Sanctuary. Those other agreements are a Development Agreement that will address the design, land usage and annexation of the Sanctuary property as well as economic incentives to Sanctuary and an agreement on public financing, which will be through the formation of a Public Improvement District (PID).

Sanctuary Development asked to amend the unsigned Aug. 17 agreements to extend the deadline on the Development Agreement until Sept. 30.

Attorney Leah Hayes told aldermen that the Aug. 17 agreements had not been signed into execution by Mayor Blancett because there were “terms that we were unable to reach a meeting of the minds” as well as the failure to have the exhibits (survey and appraisal) completed.

She said that the Village had not “received a draft” of the Development Agreement from The Sanctuary yet.

Aldermen questioned Hayes and Foutz about whether the survey or appraisal could be completed by the deadline to complete the agreements.

“We had reason to believe that the survey work had started in July,” Hayes said, “so we were surprised that it was not completed yet.”

She said that there has been some correspondence from the Sanctuary to have the exhibits for the appraisal removed from the deed and donation agreement. “An appraisal is not required for our purposes,” she said.

“We will be lucky to have it by October 30 much less September 30,” Alderman Frank Coachman said of the missing documents and agreements.

Hayes said that the Letter of Intent required both parties to negotiate and act in what she called “good faith” and that any action they take must be in “good faith to come to terms on these agreements.”

She explained that good faith is that both “parties believe they are operating with intent to come to agreement and meeting of the minds on certain conditions. You have participated in those meetings. You were there in order to arrive at an agreement that you understood and other party understood.”

She added that as long as neither party was acting in  other motives or putting in onerous provision that “there is no humanly way of meeting,” then they were meeting the requirements of acting in good faith.

“We have already done that,” Alderman Fred Brown. “We have acted in good faith.”

“We have been negotiating since Moby Dick was a minnow,” he added. “Every time we come to an agreement, something changes a week later and it is like we are starting fresh every week. It gets to the point where we have to question why are we doing this? I’m worn out doing this.”

Alderman David Williams asked if the Village could take the wastewater agreement “off the plate” and work on the other agreements.

Hayes said that the board could instruct her to continue work on the development agreement and incorporate a wastewater service agreement into it. At one time, “that was the preferred manner to go forward in negotiations,” she said.

Foutz told aldermen that correspondence from Sanctuary tells the city that “they are not intending to negotiate any further on the wastewater agreement.” Foutz added that the amendment requested by the Sanctuary mentions nothing about the provisions for the gravity line or the discharge line.

Aldermen may walk away from negotiations with Sanctuary on Sept. 3 if the provisions of the agreement are not met. How this will impact the construction of a sewer for the business district and west side of I-35 remains to be seen. If the Village walks away from negotiations with Sanctuary, it will lose a wastewater discharge permit as well as a possible site for the construction of a 300,000 gallon per day wastewater treatment plant.