07.07.2022 Council Packet
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Ammon City Council
July 7, 2022
Mayor Coletti and City Councilmembers:
2022-2023 Lease of Water Rights from City of Pocatello in Compliance with the
Final Settlement Agreement with the Surface Water Coalition (SWC)
Staff Presenting:
Micah Austin, City Administrator
Recommendation
Approve agreement as presented.
Direct Staff to research alternative options to meeting the obligations of the Final Settlement
Agreement
Summary of Analysis
1.According to the Final Settlement Agreement with the Surface Water Coalition, the City of
Ammon is required to mitigate its groundwater impacts to avoid curtailment of groundwater
pumping.
2.For the past four years, the City of Ammon has paid the City of Pocatello to lease water owned
by the City of Pocatello in Palisades Reservoir. This agreement requires those portions of water
rights to be retained in the reservoir, rather than utilized through the surface water network. By
retaining the water in the reservoir, aquifer recharge is achieved, thereby satisfying the
requirement of the obligations of the Final Settlement Agreement.
3.The total mitigation cost in this agreement is $20,882.40.
4.With the significant increase in cost, staff is recommending the City Council seek out options for
future years that would be financially sustainable over time.
Financial Impact
oThe total cost for groundwater mitigation for 2022, according to this agreement, is
$20,882.40. This cost may be different in 2023.
o This expense will be charged to the Water Fund.
Motion
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Attachments:
1.Letter to Rob Harris from Somach Simmons and Dunn
2.Final Water Rights Lease Agreement
2135 South Ammon Rd., Ammon, Idaho 83406City Hall: (208) 612-4000
www.cityofammon.usPage|1
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Sent Via Electronic Mail to:
see,
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This lease application is good for one (1) irrigation year only. A new application must
be submitted every year in which the storage is intended to be leased and used.
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DateApplicationReceivedwithbyWatermaster:________________________________________
ApplicationApprovedbyWatermaster:_____YES
_____YES(withDeliveryConditions)
_____No
WatermasterSignature:________________________________________
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WATER RIGHTS LEASE AGREEMENT
ThisLeaseAgreementismadeandenteredintobetweentheCITYOFPOCATELLO,a
municipalcorporationofIdahowhoseaddressisP.O.Box4169,Pocatello,Idaho83205,
hereinafterreferredtoas“Pocatello”or“Lessor”,andtheCITYOFAMMON,amunicipal
corporationofIdahowhoseaddressis2135AmmonRoad,Ammon,ID83406,hereinafter
referred to as “Lessee”:
1.Purpose.LesseedesirestoleasestoragewaterfromLessorforthepurposesofsupplying
aportionofthemunicipalmitigationandrechargeobligationspecifiedintheSettlement
AgreementBetweentheSurfaceWaterCoalition,ParticipatingMembersoftheIdaho
GroundWaterAssociation,andSignatoryCities(“FinalSettlementAgreement”)andas
providedforintheESPACityAgreementforAllocationofMitigationObligationsunder
Final Settlement Agreement (“City Mitigation Agreement”).
2.Term.ThetermofthisLeaseshallcommenceuponexecutionofthisLeaseAgreement
and terminate on August 31, 2023.
3.LeasedProperty.PursuanttoExhibit2totheCityMitigationAgreement,Lessorhereby
1
leasestoLesseeandLesseeherebyleasesfromLessor678.0acre-feetofLessor's
PalisadesstoragewaterrightunderContractNo.14-06-100-1825.Pursuanttotheterms
describedinparagraph4,andtheamountsreflectedinExhibit2,thetotalamountowed
by Lessee is$20,882.40.
4.RentandFees.TheLesseeagreestopayrentforstoragewaterandcertainfees(someof
whicharesetforthinthe2022IdahoDepartmentofWaterResources(IDWR)Water
District 01 Rental Pool Procedures (the “Rental Pool Rules”)), in the following amounts:
a.The rent for the leased water is $25.00 per acre-foot ($16,950.00).
b.The fees for this Lease are:
i.$2peracre-footfortheCityofPocatello’sadministrativecosts(foratotal
of $1,356.00);
ii.The“AdministrativeFee”(definedunderRentalPoolRule2.3)of$1.30
per acre-foot (for a total of $881.40) charged by Water District 01;
iii.The“BoardSurcharge”(definedunderRentalPoolRule2.10)chargedby
theIdahoWaterResourceBoard(“IWRB”)(foratotalof$1,695.00)
which is equal to 10% of the total rental price;
1
The volume of mitigation for which Lessee is responsible to satisfy its proportional amount of the Final Settlement
Agreement is determined by the allocation methods reflected inExhibit 2to the City Mitigation Agreement.
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PaymentoftheaboverentsandfeesfromLesseeshallbereceivedbyLessornolater
than August 1, 2022.
c.AnyrentoradministrativefeesnotpaidbyAugust31,2022shallbearinterestat
the rate of 12% per annum until paid.
d.WhilefixedforthetermofthisLease,therentandfeesaresubjecttochangein
the future at the discretion of the responsible entity.
5.Conditions of Lease. This Lease Agreement shall besubject to the following conditions:
a.Lessee shall pay the annual agreed upon price to Lessor for the leased water.
b.LesseeagreesthattheleasedamountshallbeassignedbacktoPocatelloforthe
purposes of recharge as described in paragraph 5.c.
c.Lessor shall ensure the leased amount is made available to IWRB for recharge.
i.However,andnotwithstandingtheforegoing,Lessorisreleasedfrom
ensuringtheleasedamountismadeavailabletoIWRBforrechargeinthe
eventofanActofGod,orasaresultofactionsbytheU.S.Bureauof
Reclamation(BOR),theCommitteeofNine,ortheWaterDistrict01
imposing restrictions on Lessor’s use of its storage water.
ii.IfsuchconditionsarisemakingitimpossibleforLessortoensureIWRB
rechargeoftheleasedamount,LessorshallreturnanyoftheLessee’s
funds collected pursuant to this Lease Agreement.
d.ThisLeaseAgreementshallbecontingentuponanyapprovalsoftheCommittee
ofNine,WaterDistrict01,IDWR,BOR,oranyotherentityasmayberequired
by state or federal law.
6.Non-UsebyLessor.Lessorcovenantsthatitwillnotdivertorotherwiseutilizethewater
leased to Lessee pursuant to this Lease Agreement during the term of this Lease.
7.UsebyLessee.DuringthetermofthisLease,Lesseewillnotdivertorutilizetheleased
water except for recharge as provided for under the Final Settlement Agreement.
8.RepresentationsbyLessor.Lessorcovenantsandrepresentsthatitisthetrueandlawful
ownerofthewaterrightwhichisthesubjectofthisLeaseAgreement,thatthiswater
righthasnotlapsed,beenabandoned,orforfeited,eitherinwholeorinpart,andthat
nothingrestrictsorprecludesLessorfromenteringintothisLeaseAgreementandLessee
utilizing the described water right.
WATER RIGHTS LEASE AGREEMENT BETWEEN CITY OF POCATELLOPage2of4
AND CITY OF AMMON
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9.Breach.IntheeventeitherpartybreachesthisLeaseAgreementandsuchdefaultsare
notcuredwithinthirty(30)daysafterreceiptofwrittennoticethereof,thenon-breaching
party, at their option, may elect any or all of the following cumulative remedies:
a.To terminate this Lease Agreement;
b.To seek specific performance of this Lease Agreement;
c.To recover any damages arising out of the breach;
d.To pursue any and all other remedies under Idaho law by reason of such breach.
10.Assignment.Excludingeffectiveassignmentthatmightoccurpursuanttoparagraph4of
theCityMitigationAgreement,thisLeaseAgreementmaynotbeassignedbyLessee
without the express written consent of Lessor.
11.ChoiceofLaw.ThetermsandprovisionsofthisLeaseAgreementshallbeconstruedin
accordancewiththelawsoftheStateofIdaho.Anyrequiredmediationandarbitration
shalloccurinBannockCounty,Idaho.Jurisdictionandvenueforanylitigationshallbe
in the District Court of the State of Idaho in Bannock County.
12.AttorneyFees.IntheeventofanyarbitrationorlitigationoverthisLeaseAgreementthe
prevailing party shall be entitled to recover reasonable attorney fees and costs.
13.BindingEffect.ThisLeaseAgreementshallbebindingupontherespectiveheirs,
successors and assigns of the parties.
14.Notice.AllnoticesunderthisAgreementshallbedeemedtobeproperlyservedifsent
bycertifiedmailtothelastaddresspreviouslyfurnishedbythepartieshereto.Until
hereafter changed by written notice, said addresses shall be as follows:
LESSOR:City of Pocatello
Attn: Legal Dept.
P.O. Box 4169
Pocatello, ID 83205
LESSEE:City of Ammon
Attn: City Attorney
2135 Ammon Road
Ammon, ID 83406
Noticeshallbecompleteuponreceipt,unlesstherecipientignoresorrefusestosignfor
thecertifiedletter,inwhicheventnoticeshallbedeemedtohavebeencompletedonthe
first attempted delivery by the United State Post Office.
WATER RIGHTS LEASE AGREEMENT BETWEEN CITY OF POCATELLOPage3of4
AND CITY OF AMMON
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DATED this ___ day of ____________ 2022.
LESSEE:LESSOR:
CITY OF AMMON, IDAHOCITY OF POCATELLO, IDAHO
By:______________________________By:_____________________________
Brian C. Blad, Mayor
Title: _____________________________
Attest: ___________________________Attest:___________________________
Konni Kendell, City Clerk
Printed Name: _____________________
Title: _____________________________
WATER RIGHTS LEASE AGREEMENT BETWEEN CITY OF POCATELLOPage4of4
AND CITY OF AMMON
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10-14-1: General Objectives and Characteristics of Zone
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10-15-1: General Objectives and Characteristics of Zone
10-15-2: Location of AccessoryStructures
10-15-3: Lot Coverage
10-15-4: Special Provisions Regarding Single-Family Attached Dwellings
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AGLE ROCK
E
NGINEERING
CIVIL PLANNING SURVEYING
IDAHO FALLS (208) 542-2665REXBURG (208) 359-2665
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10-15-1: General Objectives and Characteristics of Zone
10-15-2: Location of AccessoryStructures
10-15-3: Lot Coverage
10-15-4: Special Provisions Regarding Single-Family Attached Dwellings
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