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HomeMy WebLinkAboutCooperative Agreement with United Water for Groundwater RightsMayor Tammy de Weerd City Couneil Member=~ Keith Bird Brad Hoaglun Charles Rountree David Zaremba TO: Mayor Tammy de Weerd Members of the City Council FROM: Kyle Radelc, PE Assistant City Engineer DATE: November 27, 2013 SUBJECT: 2013 MUTUAL COOPERATION AGREEMENT BETWEEN THE CITY OF MERIDIAN AND UNITED WATER INC. I. RECOMMENDED ACTION A. Move to: 1. Approve the 2013 Mutual Cooperation Agreement between the City of Meridian and United Water Idaho Inc.; and 2. Authorize the Mayor to sign the agreement and City Clerk to attest. II. DEPARTMENT CONTACT PERSONS Kyle Radek, Asst. City Engineer 489-0343 Warren Stewart, PW Engineering Manager 489-0350 Tom Barry, Director of Public Works 489-0372 III. DESCRIPTION A. Back rg ound Over the past 18 months, Public Works staff has been working cooperatively with United Water Idaho to develop a cooperative agreement that will allow the City of Meridian to protect its water supply and water rights interests, but also remove itself as a protestant of United Water's IMAP future needs water rights application. Like United Water, the City wishes to promote the concept of securing future access to water rights for municipal purposes. Page 1 of 2 Public Works staff has worked through our water rights attorney, Charlie Honsinger, to develop the agreement and has coordinated review by the City's legal office. For a more detailed background and understanding of United Water's IMAP application, the City's protest of that application, and the development of the first cooperative agreement and this agreement, please see the attached memo from Honsinger Law. IV. LIST OF ATTACHMENTS A. Memorandum from Honsinger Law B. 2013 Mutual Cooperation Agreement Approved for Council Agenda: Date ~~ Page 2 of 2 ~~_ ,, ~';`, - ,~ . To: Tom Bany From: Charles L. Flonsinger ~.-. /'~~ Date: November 20, 2013 Re: Mutual Cooperation Agreement and United Water's IMAP Per your request, this memorandum discusses the background of the Integrated Municipal Application Package ("IMAP") filed with the Idaho Department of Water Resources ("IDWR") by United Water Idaho ("UWID") and the attached Mutual Cooperation Agreement that results in the settlement of the City of Meridian's protest to that package. 1. UWID Back round UWID obtained many of its groundwater rights from the 1930s through the 1990s by applying for a new water right permit, drilling a new well, and diverting the water from the new well into its system instead of simply transferring its existing water rights from older wells into the new wells. As a result of this practice, IDWR records showed that UWID had water rights totaling a quantity much higher than it actually diverted, needed or used. The initiation of the Snake River Basin Adjudication ("SRBA"} raised the possibility that a large portion of UWID's water rights would be forfeited. It is my speculation that this possibility first enticed UWID to file the IMAP. 2. IMAP UWID originally filed IMAP in an attempt to change the descriptions of its water rights to address certain primary concerns, including: A. The creation of a "Permissible Place of Use" within which any of its water rights could be used at any time. B. Making all of its wells points of diversion for each of its wafter rights, so that any of its water rights could be diverted from any of its wells. C. Perhaps most importantly, UWID desired to establish a "planning horizon" under the Muncipal Water Rights Act so that it could hold unused water rights without fear of forfeiture as "reasonably anticipated future needs" for the period of the planning horizon (which UWID proposed be 50 years). ~.c~. Qox s ~ 7 [3oise, tdal~~Q 8370( Fax: (ZOfi) 903-GOBS ;mail: honsingecla~~•(r?gntail.com Tom Barry Mutual Cooperation Agreement and IMAP Memo November 20, 2013 Page 2 3. Litigation over IMAP Numerous entities protested UWID's IMAP for various reasons -most of which were related to the perception that the application was an attempted "water grab." T'he City of Meridian was like any other entity, and protested the application for the same reason, but was also concerned that the proposed transfer might result in injury to some of its existing water rights. Heated litigation ensued -primarily driven by surface water users. The City settled with UWID in agreements that protected the City's water rights from oven•eaching by UWID. However, such agreements were dependent upon certain actions by IDWR that never took place. Eventually, IDWR delayed the IMAP until the elements of UWID's water rights had been properly determined in the SRBA -leading to an approximately ~-year stay in the IMAP proceedings. 4. Settlement after SRBA In the SRBA, much of what U WID requested in its IMAP filing was decreed by the SRBA District Court. This resulted in the "cooling down" of the litigants in the IMAP case as it became active again after the SRBA. The City has continued to negotiate with UWID as the original settlement agreements it entered into were ineffective after the SRBA. The negotiations with UWID have resulted in the Mutual Cooperation Agreement between the two parties. Important aspects of this Agreement are as follows: A. The City supports UWID's quest fora 50 year plamling horizon through IMAP for its water rights, and the parties agree it is appropriate for IDWR to reevaluate U WID's "future needs" for water rights within that 50 year period when new data becomes available. B. The City and UWID will each notify the other when either submits an application for a new water right, transfer, or to deepen or otherwise alter an existing well. C. To address potential well interference between the parties, both agree to notify the other if they take any action to increase diversions from a well that is within one mile of the service area of the other, and agree to provide historical pumping records from that well so that the potentially injured party can evaluate whether it should protest such actions before IDWR. Tom Bang Mutual Cooperation Agreement and IMAP Memo November 20, 2013 Page 3 D. UWID will not oppose the City's application to designate its service area as an "area of drilling concern" requii7ng heightened drilling oversight by ID'~'/R to protect the City's water supply. E. The City will change its status from that of a "protestant" in the IMAP proceeding to that of an "intervenor" so that it can monitor the process and determine whether it wants to make its own similar'future filing. I believe this summary meets your request. I would be happy to meet with any City personnel to discuss these issues at any time. Please feel free to contact me with concerns and questions. 2®13 MUTUAL COOPERA'T'ION AGRGLMTaNT BETWEEN THE CITY OF 1VIERIDIAN AND UNITED WR'I'ER )[DAHO INC. The City of Meridian ("Meridian") vid United Water Idaho Inc. ("United Water") (collectively "Parties") enter into this Mutual Cooperation Agreement ("Agreement"). RI;CIZ'AI.~ 1. IIVIAI' px•oceeding. On May 4, 2001, United Water filed a set of applications with the Idaho Department of Water Resources ("IDWR") entitled In the Matte~° of Integrated Adirnicipal Application Package ("IILIAP ") of United YVatel° Idaho Inc., Being a Collection. of'Indi>>idirad Applications for Ti°crnsfer•s of Water Rights and Applications for An~endrnent offer^»~i.ts. The IMAP is intended to quantify th~ited Water's reasonably anticipated future needs ("RAFN") pursuant to the Municipal Water Rights Act of 1996 and thereby to protect its existing portfolio of rights fiam forfeiture during its platlning horizon. The IMAP also seeks to integrate United Water's water rights poLtfolio by tnalcing each of its wells an alternate point of diversion ("APOD") far every water right. 2. Protests. The City of Meridian and others protested United Water's IMAP application. 2003 stipulation. United Water, the City of Meridian, and the City of Caldwell, exeanted a Stipulation and Withd~•a1-I/al of'Pr•otests of the City of Meridian and the City of Caldti-yell (the "2003 Stipulation"). The 2003 Stipulation is dated November 24, 2003 and was filed with IDWR in the IMAP proceeding on that day. 4. 2003 Agreement. United Water, the City of Meridian, and the City of Caldwell also entered into a Mutual Cooperation Agr•een~~erzt dated November 24, 2003 2013 MUNICIPAL. C'OOPI~,RATTON AGREL;1•'iGN•I' Page 1 Of 1595185 S / YO-147 ("2003 Agreement")• Although dated and made effective as of November 24, 2003, the 2003 Agreement was executed by United Water on January 22, 2004, by the City of Meridian on February 10, 2004, and by the City of Caldwell on February 20, 2004• 5. PI°ior Agreements did not become effective. The 2003 Stipulation and the 2003 Agreement are referred to collectively as the "Prior Agreements," The Prior Agreements were intended to frilly settle and withdraw protests filed by the City of Meridian and the City of Caldwell in the above-referenced matter, However, the Prior Agreements were conditioned upon certain actions and approvals by IDWR• Those actions and approvals have not occurred as of the date of this Agreement, 6• IMAP stay and relaunch, The IMAP was stayed by order of IDWR on December 1 &, 2003. On July 6, 2012, nearly a decade later, following issuance of partial decrees to United Water in the Snalce River Basin Adjudication ("SRBA"), IDWR approved United Watel°'s motion to lift the stay in the IMAP proceeding, 7• Shared goals fo~• long term planning. The City of Meridian and United Water have common goals and interests with respect to implementation of the 1996 Municipal Water Rights Act• Both Parties believe that sound and effective long range plaiming for muncipal water supplies, based on full disclosure and public scrutiiy, is in the public interest and in their common best interests. The Panties support the standard condition language for APODs (alternate points of diversion) that was approved by the Idaho Supreme Cotn-t in City of Pocatello >>. Idaho, 1 S2 Idaho 830, 27S P•3d 845 (2012)• This language allows municipal providers to pump ground water associated with any water right from any authorized point of diversion, while protecting other water right holders from material injury, The Patties support the concept of long term planning over a SO-year 2013 1VIIINICIPAL COOI'I;RATION AcRGCn'ITNT Page 2 Of 8 1895185 8 / 30-197 planning horizon with appropriate justifying data. The Parties agree that if municipal water providers are allowed to hold water rights free from forfeiture to meet RAFN over a multi-decade planning horizolY, it is appropriate for IDWR to impose a condition allowing projected water needs for RAFN to be periodically re-quantified (but not more than once a decade) in light of current conditions. The Parties agree that when such re-quantification of RAFN occurs the municipal provider should be allowed to extend its planning horizon for up to 50 years from that point in time and retain those water rights (and their original priority dates) that continue to be required to meet RAFN under the extended planning horizon based on appropriate justifying data. The Parties filrther acknowledge and support provisions in the Mtuucipal Water Rights Act of 1996 requil•ing a municipal provider to establish that it qualifies as such. Tn particular, the Parties acknowledge and suppot•t those provisions (contained in LC. § ~F2-222) prohibiting the sale of water rights (or portions thereof) held solely to meet RAFN where such rights will be transfen•ed to a different nature of use or to uses outside of the municipal provider's service area. The Parties recognize that these restrictions are not intended to prohibit the exchange or tY•ansfer of water rights held for RAFN purposes to accommodate adjustments in service area botuldaries between municipal providers. $, Support fur the TMAY and similar RAF1~I applications, In light of the Parties' shared goals described above, the City of Meridian has expressed its good faith intent to play a supportive role with respect to United Water's IMAP application and similar applications in the future, Likewise, United Water has expressed its good faith intent to be supportive of similar long term RAFN applications that may be bled by the City of Meridian in the future, 2013 IV117N-CIPAI. GooPGRA•rION AGRt;l;11't~NT Page 3 Of $ 1695165 R / 30-147 9, Parties' ixxtent to supersede Prior Agr•eaments and to resolve IMAP protest. The Parties have decided to change the terms of settlement contained in the Prior Agreements and wish to execute this Agreement, which will completely supersede and replace the Prior Agreements as between the Parties, 10, 11~utual coopcz°ation. In addition to resolving the City of Meridian's IMAP protest, this Agreement addresses other areas of mutual cooperation, In the past, the Parties have worked cooperatively wide each other to improve levels of communication, and to understand water supply issues and other areas of mutual concern. This Agreement confirms and reaffirms that spirit of cooperation. These terms are intended to facilitate cooperation and to avoid surprise, conflict, and injury with respect to water rights and water supply, TERN15 ®I~' AGKEEIVIEI~7T 11, Withdrawal of protest. In light of the Parties' common interests as described in the recitals above, the City of Meridian agrees to file appropriate document(s) requesting to change its status in the IMAP proceeding from protestant to intervenor, The document(s) will explain that the City of Meridian wishes to realign its party status because it no longer "protests" the IMAP and that it wishes to remain a party to the proceeding in order to protect its interests and to express its general support for the IMAP• United Water agrees not to oppose the City of Meridian's request to change its status. 12. Advance notification of water right applications. The Parties agree to advise each other at least four weeks in advance prior to filing any application with IDWR. The term "application" includes all applications involving water rights, permits, and related matters except as provided in this paragraph. 'T'his includes any application to 2013 ]vtuN~crnr~z/ Coorrat~z'rorv Acanrrvrrrvr Page 4 of 8 is~siss a i so-ia7 appropriate water, to h•ansfer or change the elements of an existing water right, to amend an existing permit, to effect an exchange of water right, to implement a mitigation plan, to create a ground water district, to create or modify a ground water management or critical ground water area, to impose any type of administration of water rights, to initiate a rulemal<ing, or to initiate any other proceeding or seek any other relief. However, the term "application" does not include a protest oz° similar objection by a Party as to an application of any sort filed by a third party. Nor does the term include an application by a Party for lease or rental of a water right. The term "application" does not include communications with IDWR to cor7•ect clerical errors, to address other ministerial matters, or to seek guidance or clarification on regulatory matters. Finally, the term "application" does not include discussions or actions on legislative, regulatory, or other public policy matters. Following notification of intent to file an application and upon request by the other Party, the applicant shall meet with the requesting Party to discuss the application. If a Party fails to provide advance notice as required by this paragraph, the approval of any application made without the required notification shall be voidable, but only if the objecting Party serves a demand letter upon the applicant within 30 days of learning of the breach and no accommodation is reached despite good faith efforts of the Parties to address the legitimate concerns of each other. This Agreement does not prohibit the Party from filing a similar application ll~ the future, which shall be subject to the same notice requirements. This remedy does not limit any other legal or administrative remedy available to the other Party to address material injury. 13. IVo opposition Yo application to designate area of drilling concern. United Water has reviewed the draft City of Meridian Regzrest to the Dis°ector° of dhe 2013 MUNICTPAI, eooPCaa•rroN AcRrrnrcN•r Page S of 8 1695185 8 / 70.147 Department of T~c~tey Resoatrces for Designation of an Area of Driiiing Concet°n 1~ithirt its Area of Impact, United Water agrees that the request is appropriate and will not oppose the application, 14, Notification pa•io~• to r•ecaaistf•uction, deepening, or redrilling of any v~~cll. Before any Party reconstructs, deepens, or redrills any well within one mile of a service area boundary shared with the other Party, it shall advise the other Party of its intent, If requested, the Party undertaking the reconstruction, deepening, or redrilling shall provide to the requesting Party a copy of pumping records for the well for the previous five years (to the extent such records are available), If the advance notice required by this section is not provided, the Party undertaking the reconstruction, deepening, or redrilling shall be limited to diverting from the reconsh•ueted, deepened, or redrilled well only at a diversion rate and annual volume that are no greater than the amount diverted prior to the reconstruction, deepening, or redrilling• This remedy is available only if the objecting Party serves a written demand upon the Party failing to provide the notice within 30 days of learning of the breach and no accommodation is reached despite good faith efforts of the Parties to address the legitimate concerns of each other, 1 S. Notification prior to diverting watex• at a rate exceeding its associated original water right. For wells within one mile of a service area boundary shared with the other Party, before any Party diverts water at a rate greater than the diversion rate authorized by the original water right associated with a well, the Partyy shall advise the other Party of its intent. If requested, the Party proposing to divert additional water shall provide to the requesting Party a copy of pumping records for the well for the previous five years (to the extent such records are available}• If a Party fails to provide advance notice as 2013 Mt)NICIPAr. COOPERATION AGREGNiliNT Page 6 Of g 13751 t~S 8 ! 20-147 required by this section, the Party diverting additional water shall be limited to pumping water from such well at a rate no greater than the diversion rate atlthol•ized by the original water right associated with that well. This remedy is available only if the objecting Party serves a wI•itten demand upon the Party failing to provide the notice within 30 days of learning of the breach and no accommodation is reached despite good faith efforts of the Parties to address the legitimate concerns of each other. 16. Cooperation and eoinmunieation. In order to facilitate and enhance cooperation and colnlnunication between the Parties, the Parties agree to meet informally at least once a year or more often at the request of either Party. These meetings are intended to provide an ongoing opportuluty for constructive dialog on issues of mutual concern regarding water supply infrastructure, public policy, and long term plamzing to meet the municipal water needs of their customers. These meetings will be attended by top level Idaho staff of the respective Parties and such others as the Parties may invite, This provision reflects the Parties efforts to improve lines of communication, but noncompliance with this provision shall not be deemed a breach of this Agreement. 17. Legal counsel. hi negotiating this Agreement, the Parties have consulted and been represented by their respective legal coLUlsel, In this matter, the City of Meridian is represented by Honsinger Law, PLLC', and United Water is represented by Givens Parsley LLP, 1$. 1Vlodification. This Agreement may be modified by the Parties by mutual Agreement at any time. I'o be effective, such modifications shall be memorialized in writing or by an exchange of emails, or by a mutually executed document. 2013 MLiNICIPAL COOPF.RA'I'ION AGRGLA~iGNT Page 7 of $ I S9S 185 N f 30.147 19. Effective date. '1~his Agreement shall be effective as of the last date shown on the signature blocks below, 20. 12enewal. This Agreement shall remain in effect for twenty-five years from the effeciivc date, and may be renewed thereafter for additional ten year periods upon agreement of the Parties. The undersigned have read this Agreement and agree to its terms. THE CITY OF MERIDIAN. Date: __._J=-~ l`-.~ ~13 By: Tammy eerd Mayor UNI"fED WATER IDAHO 1NC. Date: November 1 2013 By: Gregory y / Vice Pr e and G ral Manager 2013 MUNICiYAL COOPLItA'fiON Acar~:n~nNT Page 8 of 8 ~~~~5~~5 x ~ 3~.~.~~