Chapter 13.40
WATER RIGHT TRANSFERS

Sections:

13.40.010    Purpose and definitions.

13.40.020    Types of water rights.

13.40.030    Annexations.

13.40.040    Short plats, subdivisions, binding site plans, planned developments and other permits.

13.40.050    Amount of water and payment in lieu.

13.40.060    Payments made by the city.

13.40.070    Payments received by the city.

13.40.080    Form of transfer and conveyance of water right.

13.40.010 Purpose and definitions.

The purpose of this chapter is to obtain water rights to support new development within the city’s urban growth area (includes areas within the existing city limits and areas outside the city limits and within the city’s approved urban growth area). This purpose shall be achieved through the transfer of water rights to the city or the payment of fees to the city to be used to acquire additional water rights as a condition of connection to the city’s municipal water system. The purpose for requiring a transfer of water rights or payment in lieu thereof is to enhance the public health, safety, and welfare through a provision designed to enable the city to meet the future water service needs of property within the city’s urban growth area.

For purposes of this chapter, the following defined words shall apply:

An “applicant” shall mean the property owner(s) involved in the action that triggers the transfer of water rights under this chapter, whether that be through annexation in Section 13.40.030 or through a permit or approval process set forth in Section 13.40.040, all as more fully described in this chapter.

A “utility extension” shall mean an extension of domestic water service by an applicant within the meaning of Chapter 13.34 of the Chelan Municipal Code, that triggers the requirement for the applicant to enter into a utility extension agreement with the city before the city will provide water service to the applicant. (Ord. 1362 § 1 (part), 2008: Ord. 1322 § 1 (part), 2006).

13.40.020 Types of water rights.

This chapter shall apply to all of the various types of water rights or rights to water that are appurtenant to or associated with the real property that is subject to this chapter (excluding shares in an irrigation district formed pursuant to Chapter 87.03 RCW), and shall include all associated real and personal property interests in and to the water rights at issue. For example, the various types of water rights subject to this chapter include, but are not necessarily limited to, the following: permits, certificates, and claims issued by or on file with the Washington State Department of Ecology, or any of its predecessors. (Ord. 1362 § 1 (part), 2008: Ord. 1322 § 1 (part), 2006).

13.40.030 Annexations.

Prior to approval of any annexation of land to the city through a petition method of annexation, water rights associated with the property proposed for annexation shall be transferred to the city, subject to the provisions of Section 13.40.080. Alternatively, the city and the applicant may enter into an agreement, at the election of the city, for the transfer to the city of the water rights associated with the annexing property at such future point in time as the city determines appropriate. The purpose of the future transfer provision is to accommodate potential delays encountered in the process to transfer the water rights to the city, the submission of an application within the scope of Section 13.40.040, or continued use of water rights associated with uses in existence at the time of annexation and anticipated to continue until further development of the annexation area property occurs. As part of the agreement, the city may require (A) the applicant to acquire adequate water rights and transfer the same to the city, and/or (B) the applicant to deposit an amount of money into the city water fund not to exceed the payment in lieu of transfer provided in Section 13.40.050, which sum is refundable, without interest, in the event there is a successful transfer of water rights pursuant to the agreement referred to herein. (Ord. 1362 § 1 (part), 2008: Ord. 1322 § 1 (part), 2006).

13.40.040 Short plats, subdivisions, binding site plans, planned developments, utility extensions, and other permits.

A. Except as set forth in subsection B of this section, upon application for a short plat, subdivision, binding site plan, planned development, utility extension, or other permit that involves the providing of domestic water service by the city, the applicant shall transfer water rights associated with the property to the city, subject to the provisions in Section 13.40.080. Alternatively, at the election of the city, the applicant and city may enter into an agreement to transfer the water rights to the city at a later time. The purpose of this deferment provision is to accommodate potential delays encountered in the process to transfer the water rights to the city, or the continued use of the water rights associated with uses in existence at the time of the application and anticipated to continue until further development of the property that is the subject of the application. As part of the agreement, the city may require (1) the applicant to acquire adequate water rights and transfer the same to the city, and/or (2) the applicant to deposit an amount of money into the city water fund not to exceed the payment in lieu of transfer provided in Section 13.40.050, which sum is refundable, without interest, in the event there is a successful transfer of water rights pursuant to the agreement referred to herein.

B. An applicant applying for a building permit for a single-family residence is exempt from the requirements to transfer water or make a payment in lieu of transferring water as set forth in this chapter. Upon application for a building permit (except for a single-family residence) on a legal lot of record, the applicant shall transfer water rights consistent with Section 13.40.040 and this chapter, or, alternatively, the city may forego the water right transfer and require a payment in lieu of the water right as set forth in Section 13.40.050.

C. As part of the determination made pursuant to this section, the city shall take into consideration, and may provide appropriate credit to the applicant, if the property identified by the applicant in the action triggering the application of this chapter has previously complied with the provisions of this chapter and (1) water rights associated with said property were previously conveyed to the city, or (2) a payment in lieu was made by the applicant to the city and the funds have not been refunded by the city. (Ord. 1362 § 1 (part), 2008: Ord. 1322 § 1 (part), 2006).

13.40.050 Amount of water and payment in lieu.

A. Water Use Determination. The amount of water rights to be transferred to the city pursuant to Sections 13.40.030 and 13.40.040 shall be sufficient to serve the estimated equivalent residential units (“ERUs”) of anticipated water usage for the area that is the subject of the annexation or application based upon the city’s regulations applicable to (or, in the case of an annexation, will be applicable to) development of the property in effect at the time the petition for annexation or the application is submitted. In the event the applicant desires to irrigate common areas, open space, recreational areas, and the like, with water provided through the city’s domestic system, then the water demand for said features shall be converted to ERUs by the public works director (working with the city engineer and the city attorney) for purposes of determining how much additional water the applicant must transfer to the city for said uses. The determination of how much water the city will deliver to the property at issue (expressed in ERUs) shall be made by the public works director (working with the city engineer and city attorney) and the determination communicated in writing to the applicant within forty days of the city’s receipt of a valid petition for annexation triggering Section 13.40.030 or a complete application is received triggering Section 13.40.040. In the case of an annexation or the extension of water service outside of the city limits, in no event shall the ERUs of anticipated water usage be less than the number of ERUs required for development in the R-1 Zoning District. In the calculation of the amount of water rights that must be transferred to the city, credit shall be provided for any existing and previously approved connections to the city’s municipal water system that are currently in use on the subject property. In addition, if the applicant has an exempt well or wells and desires to transfer the water rights associated with said wells, as currently provided for in RCW 90.44.105, then credit shall also be provided for the water use associated with said wells to the extent the water rights associated with said wells are successfully transferred to the city.

B. Excess Water Rights. To the extent the water rights associated with the subject property exceed the anticipated water usage for the subject property as determined pursuant to subsection A of this section, the city and the applicant may agree as follows with respect to any such excess water rights: (1) to transfer any amount of the excess water rights to the city and, in exchange, the city shall pay the applicant for the excess water rights to be transferred to the city an amount of money agreed upon by the city and the applicant or (2) to transfer the excess water rights to the city in exchange for ERU credits associated with water provided through the city’s domestic water system to be applied to other property owned by the applicant within the city’s approved urban growth area, subject to the provisions of this chapter. In the event the excess water rights are transferred to the city, the transfer will be processed simultaneously with and as a part of the transfer process outlined in Section 13.40.080, and the city shall be responsible for the proportionate share of the transfer costs attributable to the excess water rights, as agreed to by the city. The intent of this subsection is to provide the city means to acquire excess water rights that are no longer needed by the applicant.

C. Payment in Lieu. In the event: (1) no water rights are associated with the property that is the subject of a Section 13.40.030 annexation or a Section 13.40.040(A) application; or (2) the water rights associated with said property are less than the public works director (working with the city engineer and city attorney) determines to be sufficient to serve the estimated ERUs of anticipated water usage for the property that is subject to the requirements of this chapter as determined by the public works director pursuant to subsection A of this section; or (3) the water rights successfully transferred to the city are less than the public works director (working with the city engineer and city attorney) determines to be sufficient to serve the estimated ERUs of anticipated water usage for the property that is the subject to the requirements of this chapter as determined by the public works director pursuant to subsection A of this section; or (4) a building permit application is sought (except for a single-family residence) and the city does not require water rights to be transferred as set forth in Section 13.40.040(B), then the city may elect to have the owner(s) of the subject property pay to the city, at the then current market value as determined by the public works director (working with the city engineer and city attorney), a sum of money that represents the current market value of the water rights the city estimates will be necessary to serve the property as determined in accordance with the provisions of subsection A of this section.

D. Payment of Costs. The applicant shall pay the city for all costs associated with (1) the city’s determination and evaluation of the anticipated water demand and usage for the subject property and, if determined to be necessary by the city, the current market value of an ERU of water, and (2) completing the transfer of the water rights to the city consistent with this chapter. If the applicant is making a payment to the city in lieu of transferring water rights to the city, then the applicant shall also pay the city’s estimated costs of processing the future transfer and acquisition of the water rights. The term “costs” as used in this subsection shall include, but is not limited to, city staff time, engineering fees, attorneys’ fees, application fees, Chelan County water conservancy board fees, publication fees, and any other fees or charges associated with processing and recording the transfer and acquisition of water rights.

E. Commitment by City. Effective upon the date the water rights are successfully transferred and conveyed to the city as required by this chapter and for a period of ten years thereafter, the city shall make available to the property that was subject to the application of this chapter, water usage in amounts at least equal to the amount of water usage transferred to the city by the applicant. The requirement of the city to make available this water usage shall not be construed to require the city to construct any city water system extensions or improvements that may be necessary to serve said property or the applicant. Any such city water system extensions or improvements shall be constructed by the owner of said property at the owner’s expense. Nothing herein precludes the city from making commitments to provide municipal water service as part of an annexation agreement, when the owner of property subject to the annexation is required to pay some sum to the city as set forth in subsection C of this section. In the event (1) a building permit is denied solely because of water unavailability, and (2) the property for which said building permit is sought was previously subject to the provisions of this chapter resulting in a transfer and conveyance of water rights or the payment in lieu thereof to the city (which payment has not been refunded by the city), then the party seeking the building permit, as the sole and exclusive remedy, shall receive a payment equal to the ERU(s) originally attributed to the property identified in the building permit at the value established at the time of the original application (all as determined by the public works director), without interest from the date of the original application.

F. Appeal. Any decision committed to the public works director will be reviewed by the city administrator; provided the affected applicant serves a written notice to the city requesting the review within fourteen calendar days of the issuance of the written recommendation of the public works director. If a written notice requesting review is not timely served upon the city, then the public works director’s recommendation shall be the final decision of the city. If a written notice requesting review is timely served on the city, the city administrator shall review the recommendation of the public works director and issue a final decision within twenty calendar days of the service of the notice requesting review on the city. Any final decision within the limited scope of this subsection may be appealed for abuse of discretion by filing an appeal in the Chelan County superior court within twenty-one calendar days of the date of the final decision. (Ord. 1362 § 1 (part), 2008: Ord. 1322 § 1 (part), 2006).

13.40.060 Payments made by the city.

All money paid by the city to owners pursuant to the application of this chapter shall be paid by the city water fund. Those water rights purchased pursuant to this chapter shall become assets of the city domestic water utility and part of the city’s water system. (Ord. 1362 § 1 (part), 2008: Ord. 1322 § 1 (part), 2006).

13.40.070 Payments received by the city.

All money paid to the city pursuant to this chapter shall be paid to the city water fund. All money paid to the city pursuant to this chapter shall be used by the city water utility for the following purposes: (A) purchase of water rights and to process applications for new water rights for the city to be added to the city domestic water utility system; and (B) alternatively, to the extent permitted by the laws of the state of Washington, the city may, but is not required to, use the money deposited into the city water fund pursuant to this chapter to finance water conservation measures that enhance the city’s municipal water system effectiveness. (Ord. 1362 § 1 (part), 2008: Ord. 1322 § 1 (part), 2006).

13.40.080 Form of transfer and conveyance of water right.

The transfer of water rights pursuant to this chapter shall be in such forms as may be approved by the city. The applicant shall execute all documents required by the city and/or any other governmental entity that may be necessary to achieve the purposes of this chapter. Those documents may include, but are not limited to, change in point of diversion, change in place of use, change in purpose of use, and any other documents or forms. The city will diligently pursue approval of the water right transfer. In order for a water right transfer to be completed, the water right transfer must (A) ultimately be approved by the Department of Ecology and all appeal periods must have expired without challenge, and (B) be changed to a municipal water right. The applicant must convey the water right to the city by statutory warranty deed or other appropriate conveyance instrument, as determined by the city, upon completion of the water right transfer; provided, however, that the actual conveyance may be delayed to coincide with the city’s approval of the petition for annexation or application described in this chapter, or as otherwise set forth in an agreement between the applicant and the city. (Ord. 1362 § 1 (part), 2008: Ord. 1322 § 1 (part), 2006).