§ 21-64. Acquisition of water rights by city.

(a)

It is hereby declared to be the policy of the city that, in order to provide an orderly growth of the city and to ensure the city an adequate water supply and to provide the necessary water and water rights for the continuing expansion and water right protection of its municipal supply, it has become necessary for the city to acquire all water and water rights with lands annexed to the city or from lands being initially provided with water service, or, if insufficient, to receive a monetary equivalent therefor. Direct flow mutual ditch company stock and interests in area reservoirs would provide water and water rights assisting the city in meeting and anticipating the present and future requirement for the protection of its municipal water supply system. It is deemed by the city council to be to the best interest of the city, its citizens and its future citizens to establish a policy of requiring, as a prerequisite to annexation or as a prerequisite to initiation of water service to their land, that petitioners requesting annexation of or initiation of water service to their land tender and be prepared to convey all water and water rights appurtenant to and historically used on or associated with the land, or, if not sufficient, pay a monetary equivalent therefor.

(b)

Conveyance and transfer of water rights or cash payments in connection with requests for annexation or water service. In order to assure an adequate water supply for land to be annexed to and provided with water service by the city, all petitioners requesting annexation of land, or initiation of water service to land proposed for annexation, shall, at no cost to the city, as a prerequisite to receiving the approval of city council, be required, at the election of the city, to:

(1)

Convey and transfer to the city:

a.

All water and water rights, ditches and ditch rights, reservoirs and reservoir rights, wells and well rights and all other water rights or rights to use water appurtenant to, located on or used in connection with said land; and

b.

All easements, rights of way, equipment or structures necessary for or associated with the diversion, storage, transmission and/or use of such water rights and rights to use water; or

(2)

Pay to the city in cash an amount of money sufficient for the city to acquire, or to offset the city's previous acquisition of, at applicable fair market values at the time of the petition for annexation or water service, and to obtain necessary approvals for the city's use of, water rights or rights to use water which will provide an adequate water supply for the annexed land.

The city's election of whether to accept water rights and rights to use water or cash payments shall be made as soon as possible after a request for annexation or water service is received by the city, and shall be included as a term of the annexation agreement.

Adequate water supply for annexed areas: required approvals. If the city elects to require conveyance or transfer of water rights and rights to use water, any such rights shall provide an adequate water supply for the land to be annexed and provided with water service. Such water rights and rights to use water shall be deemed to be an adequate water supply only if they are able to supply at least 1.26 consumptive acre-feet of water on a firm annual yield basis for each acre of land to be annexed after all approvals necessary to insure legal and physical availability of the water for city uses have been finally obtained, including, but not limited to, any approvals required from ditch, reservoir or irrigation companies or districts, any approvals required from the water court or any other court or any administrative approvals. City uses shall include all municipal uses, irrigation, augmentation, exchange, replacement and substitution and any other uses deemed by the city to be in the interest of the city. If approval of a ditch, reservoir or irrigation company or district is, or may be, required to allow use of the water rights and rights to use water for city uses, the petitioner shall be responsible, at no cost to the city, for obtaining such approvals, or determinations that no approval is necessary, before the city will approve annexation of or water service to such land. All such approvals or determinations shall be presented by petitioner to the city in final written form sufficient to show the company's or district's approval of city use of the water to be conveyed or transferred and to allow the city to determine the amount of water which will be annually available for city uses. Subject to cash payments which may be required under this section (b), the city shall be responsible, at its cost, for obtaining approvals required of the water court or other court or administrative approvals needed to make the water available for city uses.

Amount of cash payment. If the city elects to require a cash payment, any cash payments made to the city shall be sufficient for the city to:

(1)

Acquire, at applicable fair market values at the time the petition for annexation or water service is made, water rights or rights to use water which provide an adequate water supply for the land to be annexed or served in the amount of at least 1.26 consumptive acre-feet of water on a firm annual yield basis for each acre of land to be annexed after all approvals described in this section (b) which are necessary to insure legal and physical availability of such water for city uses have been finally obtained; and/or

(2)

Offset the city's previous acquisition of water rights or rights to use water which may be used by the city to provide an adequate water supply in the amount of at least 1.26 consumptive acre-feet of water on a firm annual yield basis for each acre of land to be annexed.

In addition, such cash payment shall also be sufficient to allow the city to obtain all court, administrative, company, district or other approvals which may be necessary to use the water rights and rights to use water for city uses, or to offset the cost of previously obtained approvals of water rights or rights to use water which may be used to provide water to the annexed or served lands. The city shall determine the amount of said cash payment in connection with each annexation, provided that the amount of money to be paid shall be not less than $1,616.00 per acre of land to be annexed.

Determination of adequate water supply. For planning purposes only, the firm consumptive amount of water which shall be deemed to be available annually for city uses from certain ditch and reservoir companies in the Sterling area will be as specified in the following table:

Water right (ditch)	Annual CU per share (ac-ft)	City CU annual requirement per acre (ac-ft)	Fractional share needed to fully supply one acre annually	Number of acres supplied with one share
Sterling No. 1	7.6	1.26	0.17	6
Farmers Pawnee	19.1	1.23	0.07	15.2
Springdale	2.6	1.26	0.48	2.1
Morgan Prewit CU per share after conveyance loss	9.35	1.23	0.13	7.4

 

In connection with a specific request for annexation or water service, however, the city shall, in its sole discretion, determine whether any and all water tendered to the city will provide an adequate water supply for the land annexed. Based on the size of or projected water demand associated with a specific annexation request, or other relevant factors, the city may require the petitioner, as a term of the annexation agreement, to provide for the city's review an analysis, and all background information used to prepare the analysis, by a competent water rights engineering firm which projects the average and firm annual water requirements for the annexed area and the amount of water which will be available for city uses from water rights or rights to use water to be conveyed or transferred to the city. The petitioner shall pay any and all costs associated with the analysis and subsequent review by the city.

City's options if tendered water rights do not provide an adequate supply. If, based on its review of the analysis, and such other information on which the city may choose to rely, the city determines that the amount of water tendered will supply less than 1.26 consumptive acre-feet of water annually per acre annexed for any reason, including, but not limited to, that adequate court, administrative, company or district approvals cannot be obtained, if the land proposed for annexation or water service is dry land with which no water rights or rights to use water are tendered to the city, or if there are material defects in the title to the water rights proposed to be conveyed or transferred, determined as set forth in this section (b), the city may, in its sole discretion, exercise any of the following options separately or in combination:

(1)

The city may require the petitioner to furnish water rights or rights to use water sufficient on their own, or, if the city agrees, in combination with any water rights or rights to use water previously tendered, to supply for city uses not less than 1.26 consumptive acre-feet of water annually per acre annexed;

(2)

The city may require the petitioner to make cash payments to the city on the basis and in an amount determined as set forth in this section (b) sufficient for the city to acquire and obtain approvals of, or offset its previous acquisition and approvals of, water rights or rights to use water which are adequate on their own, or, if the city agrees, in combination with any water rights or rights to use water previously tendered, to supply for city uses not less than 1.26 consumptive acre-feet of water annually per acre to be annexed;

(3)

The city may, in its sole discretion, refuse the annexation or service request.

All decisions regarding the choice and application of these options to any specific request for annexation or service shall be in the sole discretion of the city.

Payment for change of water rights conveyed or transferred to city. In addition to any transfer and conveyance of water rights or rights to use water, whether in full or partial satisfaction of the requirements of this section (b), the petitioner shall also make a cash payment to the city to offset the city's cost of obtaining necessary court approvals. The amount of said payment shall be determined by the city for each annexation or water service request, but shall not be less than $300.00 for each acre-foot of water which may be available for city uses under the water rights or rights to use water after any final approvals required from ditch, reservoir or irrigation companies or districts have been obtained by the petitioner.

Title to water rights to be conveyed or transferred to city. As part of the annexation agreement, the city may also require the petitioner to provide for the city's review a report, and all background information used to prepare the report, prepared by a competent attorney or other competent professional experienced in determining water right ownership which demonstrates that the petitioner is the owner of and vested with marketable title to the water rights or rights to use water which are proposed to be conveyed or transferred to the city. The petitioner shall pay any and all costs associated with the report and subsequent review by the city. If, based on its review of the report, or other information on which the city may choose to rely, the city, in its sole discretion, determines that there are material defects in the title to the water rights which will prevent conveyance or transfer of marketable title to the city, the city may request the petitioner to cure such defects. If, due to the existence of uncured title defects, the city elects not accept water rights or rights to use water in satisfaction of the petitioner's obligations under this ordinance, the city may, at its sole discretion, attempt to complete the annexation by the exercise any of the dedication or cash payments options described above in this section (b).

Determination of water requirements in specified zoned areas. The annual consumptive use water requirements, the number of shares or fractional shares needed to supply such requirements and the number of acres which may be supplied with each water share which are set forth in the foregoing table shall apply to requests for annexation or water service in all areas to be annexed to the city except those areas to be zoned R-3, L-1 or H-1, for which water requirements are expected to differ from those in the table. In those zoning areas, the city shall require that an analysis by a competent water rights engineering firm be provided, along with all background information used to prepare the analysis, by the petitioner for the city's review that projects the average and firm annual water requirements of lands proposed for annexation or water service in those areas. The petitioner shall pay any and all costs associated with the analysis and subsequent review by the city. As set forth above in this section (b), the city may also require an analysis of the amount of water which will be available for city uses from water rights or rights to use water to be conveyed or transferred to the city as part of the annexation agreement. Based on its review of the analyses, and such other information on which the city may choose to rely, the city shall, in its sole discretion, determine the water requirements for such areas. Any water rights or rights to use water tendered to meet the water requirements for a development in R-3, L-1 or H-1, or any cash payments which supplement or are in lieu of the tender and conveyance or transfer of water rights, shall then be governed by and shall meet all conveyance and transfer or cash payment requirements of this section (b) which the city elects to apply.

Schedule: requirements for completion of approvals. The city and the petitioner shall agree upon a schedule for completion of the requirements of this section (b) in the annexation agreement, which schedule may be extended in writing by the city manager or director of public works, on their own or at the request of the petitioner, if appropriate to accommodate changed or unanticipated circumstances. In no event, however, shall the city finally accept the conveyance or transfer of any water rights or rights to use water under this section (b) until all approvals required of any ditch, reservoir or irrigation companies or districts, all required court approvals and all required administrative approvals have been completed by the petitioner or the city, title to the water rights has been demonstrated to the city's satisfaction and the city has agreed to accept such water rights and rights to use water in full or partial satisfaction of the requirements of this section (b), provided that the city may agree to and require conveyance or transfer of such rights before company or district approvals are finally obtained if, in the judgment of the city manager or director of public works, doing so is necessary to enhance the city's ability to obtain court approvals of its right to use the water for city uses. Any cash payments which may be required under this section (b) shall be completed before the city will approve any request for annexation or water service.

Requirements for conveyance and transfers of water rights. All conveyances or transfers of water rights or rights to use water to the city under this section (b) shall comply with all legal requirements applicable to such conveyances and transfers. It shall be the responsibility of the petitioner, at his cost, to obtain any authority to complete, and to complete, any necessary transfers of shares of ditch or reservoir companies on the records of such companies, to complete any assignments of shares or contract rights to use water to the city and to complete all other legal requirements applicable to the conveyance or transfer. All instruments of conveyance or transfer shall be recordable and in a form satisfactory to the city in its sole discretion.

City council's final authority. The responsibility for all final elections and decisions under this section (b) shall be vested in the city council. Petitioners shall present written requests for annexation or water service to the city manager in a form acceptable to the city manager, and shall work with the city manager and other city staff to comply timely with the requirements of this section (b).

(Code 1961, § 26-12; Ord. No. 15-2000, 4-25-00, eff. 5-5-00)