The Agency expects to incur certain evaluation costs and expenses, including costs associated with obtaining appraisals; legal assistance; negotiation assistance; review of legal descriptions and plats; CEQA review as a responsible agency; and staff administrative time. The Agency also expects to incur construction oversight costs including including costs associated with plan checking, encroachment permitting, and independent compliance inspection of the construction. Cal Am would reimburse the Agency for reasonably incurred costs in accordance with the terms of a deposit and reimbursement agreement. The consultant appraisal, negotiation and legal services are estimated to cost between $60,000 to $70,000 and will be determined based on the results of the Request for Proposals. Staff administrative costs will be ongoing during the period of the agreement  and are estimated to cost between $15,000 to $30,000. The Agency initial costs would be funded by the current Monterey Branch Line lease revenues and subsequently reimbursed by Cal Am.

Cal Am has been in discussions with Agency staff about obtaining water pipeline easements for segments of the Monterey Peninsula Water Supply Program (MPWSP) located within the Agency-owned Monterey Branch Line rail corridor. The water pipeline will run approximately 9.1 miles from Light Fighter Boulevard in Seaside to Merritt Street in Castroville. Cal Am is interested obtaining in a new permanent easement and a temporary construction easement. The permanent easements would be 20 ft wide for single pipeline locations and 25 ft wide for dual pipeline locations. The temporary construction easement would require the full 100 ft width and would be needed for the entire construction period. The project has been experiencing some delays in approval and is still in the environmental review stage. The final Environmental Impact Report is expected to be completed in late 2017, followed by execution of easements by about late 2017 to early 2018. The construction is currently scheduled for a two year period from June 2018 through May 2020.

An independent appraisal is necessary in order to assure that fair market value is paid for the easements. Prior TAMC board approval was obtained at the March 22, 2016 for staff to issue a Request for Proposal for appraisal services, legal assistance and negotiation assistance for the easements. Agency staff also expect to incur construction oversight costs  including costs associated with plan checking, encroachment permitting, and independent compliance inspection of the construction.  Direct costs, including consultant and legal costs, shall be reimbursed without markup. Staff administrative costs would be charged at the hourly, fully burdened rates.

A reimbursement agreement between the Agency and Cal Am for the proposed easement acquisitions would allow the Agency to obtain repayment of the costs to TAMC associated with the granting the easements. The agreement would include an initial deposit by Cal Am to the Agency, followed by subsequent additional deposits in accordance with the terms outlined in the the deposit and reimbursement agreement. The additional deposits would be for additional reasonably expenditures incurred by the Agency. The Agency would notify Cal Am and provide a budget describing the additional expenditures. Once approved,Cal Am would deposit the additional sum to increase the remaining deposit  to the amount necessary to cover the Agency's remaining costs. This process would be repeated as necessary. The Agency would then draw from the deposited funds to pay the reimbursable costs.  The consultant appraisal, negotiation and legal services are estimated to cost between $60,000 to $70,000 and will be determined based on the results of the Request for Proposals. Staff administrative costs would be ongoing during the period of the agreement  and are estimated to cost between $15,000 to $30,000.

After receiving Board authorization to enter in the reimbursement agreement, staff will work with Cal Am to finalize the terms of the reimbursement agreement and set up the deposit fund for reimbursement of reasonable costs. This would be followed by the release of the Request for Proposals for appraisal services, legal assistance and negotiation assistance for the water pipeline easements within the Agency-owned rail corridor. The process of valuing and granting the easements is expected to take several months. Staff would then return to the board for consideration of the easement acquisition agreement for the new Cal Am water pipeline.