City Council Minutes

Thursday, November 8,2001



ST. GEORGE CITY COUNCIL MINUTES
SPECIAL MEETING
NOVEMBER 8, 2001, 5:00 p.m.
CITY COUNCIL CHAMBERS

PRESENT:
Mayor Daniel McArthur
Council Member Bob Whatcott
Council Member Rod Orton
Council Member Sharon Isom
Council Member Suzanne Allen
Council Member Larry Gardner
City Manager Gary Esplin
City Attorney Jonathan Wright
City Recorder Gay Cragun

OPENING:
Mayor McArthur called the meeting to order and welcomed all in attendance. The pledge of allegiance was led by Council Member Allen, and Mayor McArthur offered the invocation.

PUBLIC HEARING RE WEST CITY SPRINGS:
Public hearing to consider terms, conditions, and manner of acquisition of West City Springs irrigation water certificates of use.

Mayor McArthur announced that Council Member Gardner, who served as a member of the West City Springs irrigation committee, would present the proposed terms of settlement as agreed to by the City Council and irrigation committee.

Council Member Gardner advised that it is commonly recognized that water is a precious commodity in the desert, and 70% of West City Springs water has been wasted. There has been a concerted effort by the irrigation committee, staff, and the City Council to address the issue in an equitable manner. Staff has been involved in the difficult task of evaluating the water situation. He commented for those not involved in the committee, the committee has represented their views appropriately. There is a huge difference of opinion on ownership of water rights, and while the City had an analysis performed by the State Engineer?s Office, the City Council has chosen not to make this issue a part of tonight?s discussion. The City is willing to concede that water use rights have been established over the last 150 years and will make sure there is adequate recognition for that right. Therefore, the City?s proposal is as follows:

The City will take on the task of collecting the water at the West City Springs and putting it into the culinary system. Staff has assured that this can be done in a feasible and economical way to protect wetland issues.

Users will have the opportunity of continuing to use the water through the tap, or sell their user right to the City. The decision will be up to the user. The open ditch system will no longer be used for delivery of West City Springs water.

The City, rather than debating the value of a user right, took what seemed to be an appropriate value, after research by Rick Hafen and the irrigation committee, and came up with a high and low figure. The amount decided upon is $3,000 a share. It was also determined that motivation for the City to do the project was to have access to the water to alleviate some of the pressures in the culinary system. If individuals choose to sell their user rights, the City will have first right of refusal. There does need to be some discussion, however, on who will be recognized as holders of the rights. There needs to be some identifying process of ownership, as well as having paid the assessment, and having been an active user in the last five years. If

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November 8, 2001
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the user chooses to take the water through the pipe, they will be charged the normal minimum culinary base rate for the first 5,000 gallons used, then they will receive an additional 90,000 gallons per month per full share at a reduced irrigation rate. After usage of the 90,000 gallons, they would then be charged the normal culinary rate for any additional usage. The amount charged for the 90,000 gallons per share equates to the actual pumping cost of putting the water into the system, and is speculated to be 17.5? per 1,000 gallons, much less than the culinary rate.

If the user chooses to keep the water, it must stay with the property as most irrigation rights are site specific in nature. Also, if the water is kept, it cannot be used for commercial purposes.

Council Member Gardner explained that this proposal is a win-win for everyone involved, with the only caveat being that all irrigation users must agree to it. If the matter is litigated, even by one person, the negotiations will be thrown out and the City will be bound by the decision of the court. The only way the proposal can work is if everyone feels comfortable with it and signs on. He explained that in order for the proposal to work, there needs to be recognition by the users right away so that the water can be put into the system. Everyone will need to sign on and declare to the City their intentions before the end of the year in order to begin the project by the first of the year.

Mayor McArthur explained that the 17.5? per 1,000 gallons cost is based on the actual cost of pumping the water, and this figure will change from time as time as the actual cost of pumping the water is re-evaluated.

Council Member Gardner commented that this is the way it is with every irrigation system; costs must be determined every year in order to make an assessment.

Steve Heaton expressed frustration that everything the City Council agreed to except for one item was outlined in the irrigation committee?s letter to the City dated January 9, and the matter should have been resolved long ago.
Mr. Heaton then reviewed several of the items in the January 9 letter, and advised one of the suggestions was that each user would be given their gallonage credit at the beginning of each year. He was informed the users would receive their 90,000 gallon credit each month.

Mr. Heaton inquired if the irrigation users would be able to monitor the manner in which the pumping fee is calculated.

Council Member Gardner replied that they would.

City Manager Gary Esplin explained that the pumping fee is tied to actual pumping costs, without O&M costs, and the City Council agreed this amount would be 17.5? per 1,000 gallons.

An unidentified man in the audience wanted assurance that the pumping costs would be shared by all shareholders, and not just those who use the water.

Council Member Gardner commented that in any company, those costs are attributed by volume and capacity, and the City is willing to pick up its portion with the users paying their portion.



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An unidentified man in the audience inquired if the users would be charged only for the water that crossed their curb through the meter, and he was assured this would be the case.

Steve Heaton questioned the validity of the 17.5? figure, as different figures have been arrived at in the past.

City Manager Gary Esplin replied that it is the intent of the City Council that the rest of the citizens in St. George do not subsidize the cost of providing this service to the irrigation water users, and that is how the 17.5? cost was arrived at. He suggested that this amount could be frozen for the next three years, and then a re-examination of the actual cost of pumping the water be made at that time. If costs go up 2% at this time, then the figure would be raised 2%.

Council Member Gardner explained that in the past when other figures were arrived at, they included not only the West City Springs, but also the East City Springs, and the cost of handling all the irrigation system.

Mayor McArthur advised that the City Council has agreed to charge only the pumping cost, whatever that may be, whether it is 15? or less, but the City Council is advised that the actual cost is 17.5?.

Steve Heaton asked for a definition of what is included in the cost.

City Manager Gary Esplin advised that the City can do that, but is not prepared to do so at this time. The City?s intent is to cover its costs to provide water to the users. If the cost is only 10?, then it will be adjusted. The maximum will be 17.5? for a three year period, then the cost can be adjusted.

An unidentified man in the audience expressed concern that if the City bought all the user rights until just one or two people were actually using the water, they would have to bear the total cost of pumping the water.

Mr. Esplin replied that the cost is a proportionate per gallon cost.

Mr. Heaton stated he assumed the use of the water would be in perpetuity. He commented that the committee also recommended the City award a $150,000 lump sum for installation of sprinkler systems, as the elderly will need assistance in converting their systems and filling their ditches.

Mayor McArthur advised that the terms presented by Council Member Gardner are what the City Council has agreed to after a lot of negotiation.

Finance Director Phil Peterson commented that he receives many calls from people who may have inherited user rights from their parents who are now deceased, and they have been using the water for the past 20 years but never actually transferred the rights into their name. In arriving at who will be entitled to settlement, he recommended that whoever has been receiving and paying the bill be a party to the settlement agreement.

Ron Whitehead inquired how the cost of pumping was determined and the formula used.

City Manager Gary Esplin replied that the City will produce that.



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November 8, 2001
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An unidentified man in the audience inquired if the users had to pay for the 90,000 gallons whether they used it or not. He was advised that they only had to pay for what they used, and the water would be available year round.

An unidentified man in the audience stated that he and his father both live on the same street. The water is in his father?s name, yet he uses it at his house. He asked if there were some way to divide the water.

City Manager Gary Esplin replied that the arrangement will be made with whoever is paying the bill, and the water cannot be moved to any other location. However, in unique cases the City could work individually with users.

An unidentified man in the audience commented that it was his understanding the water could be transferred from one property to another, as long as it was within the geographical boundaries of the West City Springs ditches.

Mayor McArthur replied that the City Council has determined this can no longer be the case.

Council Member Gardner commented that the City Council expects that there will be excess water coming back to it to make the project doable. If users are able to transfer their rights to other properties, less water would be coming back to the City. He stated that the City does not desire to be arbitrary or capricious, nor does it want to be taken advantage of, and it must make decisions in the best good of all its citizens.

An unidentified woman in the audience asked for a guarantee that the settlement agreement will not be negated by another city council. She asked if there were going to be formal contracts signed.

Council Member Isom replied that everyone will have to sign an agreement by January 1, 2002.

Mayor McArthur clarified that 90,000 gallons will be available per month, not per year.

Zola Hunt commented that by doing this, the City was imposing upon her financial stress as she travels frequently on business and it is going to be difficult to water her entire yard. Additionally, she has trees which are over 100 feet tall which are automatically watered any time there is water in the ditch. She stated that there must be some kind of grant or proposal to help those who cannot afford to install a sprinkler system.

Mayor McArthur replied that the City is only offering to purchase the right, or deliver through the tap.

Council Member Gardner replied that Ms. Hunt raised an important issue, and the City Council has been trying to increase urban forests and keep trees alive, and some trees may have roots deep enough to survive. He commented that although he was not sure what could be done individually, the issue needed discussion.

Mayor McArthur advised that this would be a separate issue from this discussion.



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November 8, 2001
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Keith Albrecht commented that five of his neighbors have irrigation water but do not use it and it just runs down the ditch and is wasted. He commented that water was a blessing and a gift and should not be wasted.

Carol Sapp asked if there were going to be a minimum share affected. She was advised that the City would ratio it out, whether it be one-third or one-quarter share. She advised that irrigators use more than 90,000 gallons a month in the hot summer months, and asked if water not used in the winter can be banked for use in the summer.

Council Member Gardner replied that switching to a sprinkler system will result in a lot of water savings, and it is anticipated that use of sprinklers will cut the use in half.

Jim McArthur asked that the Council consider letting the water be moved anywhere within the old City Springs area originally designated as the area between the two ridges. He stated that if any of the users had known
that the time would come when they could not transfer their share to another piece of property, they would never have sold them. He commented that some people have 20 shares yet will only be able to use half of them. He also stated that water at a discounted rate could be offered as an incentive for development of the downtown area so that families would move back into the area. He suggested that a committee be established to discuss these issues.

Mayor McArthur replied that if the City had more water then it could use, it would have the option of selling it. Outside of this discussion, there are some things that can be done to enhance the downtown area, and these can be discussed at a later date.

Council Member Orton commented that as discussed many time, the City Council is well aware of the needs in the downtown area and will look at ways to enhance it.

An unidentified man in the audience asked what assurance the users would have that they could have irrigation water out of the culinary system when the present City Council was no longer in office.

City Attorney Jonathan Wright replied that the purchase/settlement agreement would avoid the possibility of having another City Council take away these rights. However, if the agreements are not signed by everyone, the City Council would have no interest in paying for the shares if questions and problems still linger. The City Council is trying to settle the issue now once and for all.

Mayor McArthur reminded those present that if users chose to sell, they did not have to sell all their shares; they could retain any portion.

An unidentified man in the audience said he was not sure how much it would take to sprinkle his yard, and he would like to have one season to determine how much water he needed to retain.

Council Member Orton inquired what one share would irrigate.

Water and Power Director Wayne McArthur replied that according to the Virgin River Decree, it takes one acre foot of water, which is one share, to irrigate one acre.



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November 8, 2001
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Council Member Orton advised that if someone owned one acre, they might want to keep one full share. If they owned half an acre, they might want to keep one-half share.

Council Member Gardner commented that it might take one share to water one acre in a field, but this does not necessarily equate to the West City Springs.

Water and Power Director Wayne McArthur advised that users might want to retain a full share for an acre of property to be conservative.

Council Member Whatcott advised that his water bills for the past ten months for his home, which consists of a one-third an acre with a lot of grass and two teenagers taking several showers a day, indicate that in January his family used 14,000 gallons. The highest use month was August, and 39,000 gallons were used.

Mayor McArthur advised that if there is concern, more water could be kept as a cushion.

An unidentified man in the audience commented that his yard is 60 x 120, and he waters his front yard with a sprinkler and his back yard with flood irrigation, and he uses more water than the figures are projecting.

Hylan Kirkland commented that if a person owned three shares, and sold his property for a commercial use, the City would get the water for nothing.

City Manager Gary Esplin replied that this was true. In order to bind the City Council, a purchase agreement is necessary, and it must be determined at this time. Otherwise there is no agreement and a future City Council could take the water.

Jim McArthur commented that he did not receive notification of the meeting, and there must be other things falling through the cracks. He inquired what percent of users were notified about the meeting.

Water and Power Director Wayne McArthur advised that about 20 notices were returned to his office.

City Manager Gary Esplin advised that it was the City?s intent to send notices to all those on the City?s list, and the City did not try to exclude anyone.

Mayor McArthur commented that the City had many people to contact and would make every attempt to do so.

Carol Sapp thanked the City Council for giving users options, and commented that personally she thought the proposal was fair for all. She said that she has not known the City to ever turn away a chance to purchase water, and the proposal will save a valuable resource and reduce waste. There will be costs to the users, but the City has come a ways in its proposal, and so have the users, and that it how it should be done.

Steve Heaton stated he appreciated the City Council for all they had done.

Council Member Gardner asked if there could be a consensus up front of the commitment by users to either sell or keep the water.




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November 8, 2001
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City Manager Gary Esplin commented there could be separate agreements for the few cases which need further discussion, but the City?s intent is to resolve the issue by January 1 so the water can be put into the system.

A motion was made by Council Member Garder to move forward with the water project to put the West City Springs into the City?s culinary system by January 1, 2002. Users will have to choose to maintain use of the water and access it through the tap, or sell all or part of their shares to the City. The City will pay $3,000 per full share, with the City having the first right of refusal for all water sold. The City will recognize any user right active within the last five years, but there must be some evidence of ownership of the user right. Users who choose to maintain their right will pay the basic monthly culinary minimum charge, and then be given a reduced rate. This year the reduced rate is 17.5? per thousand gallons for 90,000 gallons. Once that gallonage is consumed, any additional water will be charged at the regular culinary rate per the existing schedule. User rights will stay with the property, and water cannot be sold for a commercial purpose. If there is litigation, the City will be forced to accept the decision of the court, and the proposal will be void. In special cases, there may be a committee formed to accommodate unique situations to prevent litigation.

City Manager Gary Esplin clarified that the 17.5? rate would be honored for three years based on a formula to be spelled out.

The Mayor and City Council clarified that this proposal is in perpetuity.

City Manager Gary Esplin clarified that as part of the compromise and settlement agreement, the City would recognize user rights. If there is no settlement and the matter is litigated, the City will not recognize user rights, and the court will decide the matter.

City Attorney Jonathan Wright clarified that all users will have to sign on to the proposed agreement. If one user does not, it will cost the City the same to litigate it, whether for one or for many.

Steve Heaton commented that the City will never get all the signatures required by the end of the year as too many people are out of town and out of the country.

Mayor McArthur advised that City staff will make every attempt to do so.

City Manager Gary Esplin advised that if staff is making progress, the date may have to be extended.

Steve Heaton inquired if one user did not agree to the proposal, if there would be no deal.

City Manager Gary Esplin replied that the matter would have to come back to the City Council. However, if the matter was litigated, the deal would be off.

Mayor McArthur commented that perhaps the City could enter into a special agreement with the user who would like to sprinkler his yard for a year in order to determine actual use.

Council Member Whatcott suggested the user could enter into the agreement, with the amount to be determined later.



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November 8, 2001
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City Manager Gary Esplin stated he hoped those present would help to explain the proposal to those who could not be present and help obtain signatures.

Steve Heaton commented that he wished the City could assist some of the older people in putting in sprinklers.

Council Member Gardner encouraged the issue to become a family, neighborhood and church issue, not just a City issue, and there are many ways to resolve this concern. However, he clarified that his motion does not include an obligation to assist with sprinklers.

Council Member Whatcott clarified that for those who have user rights but no property to attach to them, there is no value to the right other than to sell it to the City.

City Manager Gary Esplin advised that in this case, if the user is current on his or her assessment for the past five years, the City will purchase the right, and there is no reason for them to hold on to it if the water cannot ever be used.

Council Member Gardner?s motion was seconded by Council Member Orton. Mayor McArthur called for a vote, as follows:

Council Member Gardner - aye
Council Member Orton - aye
Council Member Allen - aye
Council Member Whatcott - aye
Council Member Isom - aye

The vote was unanimous and the motion carried.

ADJOURN TO EXECUTIVE SESSION:
A motion to adjourn to an executive session to discuss litigation was made by Council Member Isom and seconded by Council Member Allen. Mayor McArthur called for a roll call vote as follows:

Council Member Isom - aye
Council Member Allen - aye
Council Member Isom - aye
Council Member Whatcott - aye
Council Member Gardner - aye

The vote was unanimous and the motion carried.

RECONVENE:
The meeting reconvened upon adjournment of the executive session.

SETTLEMENT AGREEMENT:
A motion was made by Council Member Isom and seconded by Council Member Allen to authorize a settlement of a sexual harassment claim made by an employee for the amount of $13,500. Mayor McArthur called for a vote, as follows;

Council Member Isom - aye
Council Member Allen - aye
Council Member Gardner - aye
Council Member Orton - aye
Council Member Whatcott - aye

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November 8, 2001
Page Nine

The vote was unanimous and the motion carried.

The meeting then adjourned.



______________________________
Gay Cragun, City Recorder