EXHIBIT 10.28
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding dated December 4, 2002 is made between
the State of Connecticut (the "State"), acting through its Department of
Environmental Protection ("DEP"), and Connecticut Water Service, Inc. and its
Connecticut subsidiaries including Crystal Water Company and Gallup Water
Service (collectively ("Utility").
WITNESSETH THAT:
WHEREAS, Utility has land holdings in Connecticut;
WHEREAS, the State has established a goal to preserve 21% of
Connecticut's land as open space;
WHEREAS, the State, in 1997, intensified its efforts to preserve open
space in Connecticut by establishing a goal for the State to have at least ten
percent of the State's land area held by the State as open space land;
WHEREAS, the State's legislature, in 1998 passed Public Act 98-157,
which created the Protected Open Space and Watershed Land Acquisition Grant
Program, to provide matching grants for municipalities, nonprofit land
organizations and water companies to preserve open space;
WHEREAS, the State legislature, in 1999, passed Public Act 99-173,
which established the goal of having municipalities, land conservation
organizations, and water utilities hold 11% of Connecticut's land as open space;
WHEREAS, in 2001, the Connecticut General Assembly passed Public Act
01-024, which stated that the DEP shall conduct an evaluation of lands of Class
A water companies as defined in Section 16-1 of the general statutes, to
determine the resource value and potential desirability of such lands for
purchase for open space or passive public outdoor recreation or natural resource
conservation or preservation;
WHEREAS, the State and Utility agree that preserving open spaced
throughout the state is an important goal;
WHEREAS, the State and Utility now wish to memorialize their present
understandings and intentions:
NOW THEREFORE, the State and Utility hereby agree as follows:
1. There will be a voluntary two-year moratorium on the sale of all
undeveloped land holdings of the Utility that are categorized as
Class I, II and III land, other than land under contract for sale
or where the sale has been approved by the Department of Public
Utility Control ("DPUC") as of the date of this Memorandum,
approximately 7117 acres.
2. During the moratorium period, the DEP, in cooperation with the
Utility will undertake the assessment and evaluation of all Utility
Class 1, Class II and Class III land holdings to determine the
desirability of purchasing such land for open space and shall
develop strategies to fund the acquisition of such properties in
fee or by easement from the Company. DEP will consult with the
State Department of Public Health (`DPH") regarding the importance
of such Class I and Class II land to the public drinking supply
watershed needs in accordance with applicable regulations. Utility
agrees to provide the DEP with maps and any other documents that
will assist in the assessment. The parties agree to begin the
assessment without undue delay, including developing strategies to
fund the acquisition of such properties, during the moratorium
period.
EXHIBIT 10.28
3. Notwithstanding the moratorium period, the Utility may sell to the
State, the town in which the land is located, or any non-profit
land holding organization consistent with the Connecticut General
Statutes and regulations, any Class I, Class II and Class III land
for the purposes of preserving open space, consistent with
watershed needs. The parties agree to negotiate in good faith to
determine a price for Utility's Class I, Class II arid Class HI
land holdings based on appraised values.
4. Notwithstanding the moratorium period, upon the determination by
the DEP that certain parcels of Class I, Class II and Class III
land do not meet the conservation needs of the Recreation and
Natural Heritage Trust Fund or the Protected Open Space and
Watershed Land Acquisition Grant Program, and upon determination by
the DPH that, in the case of Class I and Class II land, said land
is not required for public drinking supply watershed needs, the
Utility may apply to the DPUC to sell said parcels in accordance
with the statutory approval procedures for sales of water company
lands.
5. A determination by the DEP that it is desirable to purchase land
for open space and by the DPH that said land is not required for
public drinking supply watershed needs, does not commit the utility
to sell such land or the DEP to acquire such land, and the utility
specifically reserves the right to make use of any such land for
its business purposes.
6. Nothing in this MOU including the moratorium period shall apply to
the acquisition by a third party of substantially all of the assets
of Connecticut Water Service, Inc. and its subsidiaries or
substantially all of the stock of Connecticut Water Service, Inc.
7. In any purchase by the State of land owned by the Utility, the
State intends to finance such purchases through the Recreation and
Natural Heritage Trust Fund, the Protected Open Space and Watershed
Land Acquisition Grant Program or any other public or quasi-public
financing alternative. Any sales of Class I, Class II or Class III
land to the State shall occur according to a schedule agreed upon
by the parties and in compliance with the Connecticut General
Statutes.
IN WITNESS WHEREOF, the parties have executed thus Memorandum of
Understanding as of the 4th day of December 2002.
STATE OF CONNECTICUT CONNECTICUT WATER SERVICE
DEPARTMENT OF ENVIRONMENTAL
PROTECTION
By: /s/ Arthur J. Roeque, Jr. By: /s/ Marshall T. Chiaraluce
Arthur J. Roeque, Jr. Marshall T. Chiaraluce
Commissioner President and CEO
Date: November 22, 2002 Date: December 4, 2002