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City’s purchase of Miller ground didn’t include all of water rights PDF Print E-mail

By Jan Schultz
The Imperial Republican

A lengthy part of Monday’s city council meeting was spent discussing the city’s recent purchase of the Melvin and Dorothy Miller ground, east of the Schroeder ball fields.
Owners of Moreland Realty, which handled the sale, attended the meeting to discuss the issue.
This summer, the city purchased the former Miller ground, and city officials believed they were getting all of the ground’s water rights with it.
The second page of the purchase agreement the city approved at a June 23 council meeting, however, indicated only 63 certified acres with water allocation was included.
Unbeknownst to the city until recent weeks, the NRD approved a water rights transfer in July from the Miller ground to AK Acres, involving 20 acres from the property.  
The city purchased 77-plus acres in the deal, but the ground actually has a certified water allocation of 83 acres, according to Mike Moreland, all of which Miller had retained even though he had sold several lots off in recent years.
Mayor Annie Longan, who was involved in the land purchase negotiations with other city representatives, said Monday she believed all along that all of the ground’s water rights were being purchased in the sale.
The council, other city officials and members of the LB 840 citizen’s advisory committee were also under that impression throughout the land purchase negotiations.
“I personally thought we were getting all of the water rights for the land that we were buying,” Longan said Monday.
However, Jane Moreland of Moreland Realty said it was stated in the negotiations all along what was being purchased, and that was 77-plus acres of ground and 63 acres of water allocation.
She said Tuesday there had been several contracts drawn up throughout the negotiations, but all included the provision stating that the property was selling with 63 URNRD certified acres.
The signed purchase agreement does state the 63 acres on the second page under “other provisions,” but on the front page of the document, Longan noted, it states the buyer is purchasing “all mineral and water rights owned by the seller.”
Moreland said that is “common ag land knowledge as to how much the seller is selling.” The second page then clarifies the amount being purchased by that buyer, she said.
Moreland said there is a “misunderstanding or misrepresentation out there, that it wasn’t clear” how many acres of water rights the city was getting.
“But, it was clear,” she said. “It said exactly what the city was purchasing.”
City Attorney Phil Pierce had reviewed the purchase agreement document to verify it was a valid contract.    
But, Longan said it could have been clarified better with her and others involved in the negotiations.
“Why not just tell us we were only getting 63 acres (of water rights)?” Longan asked.
Moreland maintains it was clear in the purchase agreement and it was discussed in negotiations. She said Tuesday it should have also been spelled out in the city-funded appraisal done on the property.
Moreland said at Monday’s meeting the Millers had always intended to sell only the water rights on the current 63 irrigated acres to the city.
But, that’s not how Longan remembered it.
“I remember we got all the water. You remember we got only the irrigated” acres with regard to the water rights, Longan said.
“Why couldn’t it have been said (to the city) that we’re in the process of doing this (water transfer), so you’re only actually getting 63 acres?” Longan asked.
“It could have been brought up in the conversation,” she said.
Unfortunately, Moreland said, it wasn’t always the same people negotiating for the city on the land purchase.
If she had it to do over again, Moreland would insist that the same person be at all the negotiation meetings. She believes that’s where communication broke down.
Mayor Longan said, “It’s a done deal now” and the city will move forward.
“I still think there was a little lack of communication, a little lack of clarification.
“We’ll be a lot more careful about it” in the future, Longan said.
“It’s too bad we have to be that way,” said Council President Doug Gaswick.
He added they thought they were dealing “in good faith,” but said the council takes full responsibility.
“We learned a lesson here,” he said.
At last Thursday’s Upper Republican NRD meeting, NRD board members voted 8-3 not to reconsider the water transfer approved on the acres in question.
The NRD board had been sent a letter from City Attorney Pierce, requesting  they reconsider the water transfer application at their Oct. 22 meeting.
The city, which closed on the land purchase in August, plans to use the ground as an economic development tool for light industrial development and possibly housing.
City sales tax dollars from the economic development side will be used to pay back the bonds used in purchasing the land.