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<br />2. <br /> <br />Negotiate <br /> <br />with <br /> <br />the <br /> <br />Guadalupe <br /> <br />Blanco <br /> <br />River <br /> <br />Authority <br /> <br />to <br /> <br />acquire <br /> <br />4,000-6,000 <br /> <br />acre <br /> <br />feet <br /> <br />of <br /> <br />firm yield <br /> <br />from Canyon <br /> <br />Reservoir. <br /> <br />We proposed to begin payments on first half of <br /> <br />our future requirements immediately and to pay for the second <br /> <br />half upon delivery of water. <br /> <br />However, <br /> <br />GBRA I S most recent <br /> <br />(February 16, <br /> <br />1988) statement vis-a-vis John Specht is that <br /> <br />GBRA would not charge anything for a first right of refusal <br /> <br />for the total commitment. There could be a legal problem <br />relative to the binding effect of an option without <br />consideration or inadequate consideration. If a bonafide <br /> <br />offer is made from a third party for the reservation, the <br />Ci ty will have to decide whether to pay the amount of its <br /> <br />commitment or forego the opportunity. <br /> <br />COSTS TO THE CITY OF SAN MARCOS: <br /> <br />SHORT TERM <br /> <br />Since we do not anticipate receiving treated water within the <br />next two years and possibly longer, San Marcos' first year <br /> <br />costs would be as follows: <br /> <br />Financial costs associated with oversizing the treatment <br /> <br />plant, <br /> <br />acquiring <br /> <br />land <br /> <br />(estimated <br /> <br />cost <br /> <br />is <br /> <br />around <br /> <br />$200,000), legal costs associated with land acquisition, <br /> <br />obtaining <br /> <br />appropriate <br /> <br />permits <br /> <br />from <br /> <br />the <br /> <br />Texas <br /> <br />Water <br /> <br />Commission, etc. to position San Marcos to receive water <br /> <br />in the future. <br /> <br />Purchase expense for raw water commitments from GBRA at <br /> <br />the <br /> <br />time <br /> <br />another <br /> <br />bonafide <br /> <br />offer <br /> <br />is <br /> <br />made <br /> <br />for <br /> <br />our <br /> <br />reservation. <br /> <br />Costs are currently priced at $44,760 per <br /> <br />1,000 acre feet. <br />