Please help break the Salt Lake City water monopoly by calling the Governor’s Hot-line 801-538-1045 and leave this message: “Please help Utah by breaking the Salt Lake City water monopoly.”

Salt Lake City has 5 of 7 board seats on Metropolitan Water District of Salt Lake & Sandy. These 5 of 7 seats are appointed by the Salt Lake City Council.  Salt Lake City’s Water Department claims it does not control the Metropolitan Water District of Salt Lake & Sandy.  The City’s claim is false.

“Through taxing capability, the MWD gives Salt Lake City and Sandy City the ability to provide alternative means of financing large-scale water projects that would otherwise exceed the City’s constitutional debt limitation.” Salt Lake City Watershed Management Plant March 1999 final draft

Water Districts are also used to circumvent Utah’s Constitutional ban against cities alienating water rights and water works.  Metropolitan Water District of Salt Lake & Sandy is an alter ego  of Salt Lake City’s Water Department. Given the foregoing, it would be prudent to have effective oversight of water districts other than the City Council which appoints board members.  Circular oversight is ineffective and misleads Salt Lake City residents.  Salt Lake City residents are told the property is not taxed by the SLC for water.

This is technically correct, but misleading because Salt Lake City residents pay a Metropolitan Water District of Salt Lake & Sandy property tax.  This water district tax is 8 times higher than Orem City’s which has water costs 1/3 to 1/2 less.

What price should the Salt Lake City water monopoly charge? Because Salt Lake City water monopoly has no competition, how are Big-Government waste, inefficiencies, and fat reduced while maintaining quality water and good service?

Salt Lake City: $1.18 to $3.40 per 1,000 gallons, 1 employee per 346 connections with a water district tax 733% higher than Orem City’s.

Orem City: $0.57 per 1,000 gallons with 1 employee per 833 connections.

Monopolies are like lumbering elephants.  It is difficult to turn them into competitive race horses.

The CUP is bring 70,000 acre-feet of water (22.8 Billion Gallons) to Salt Lake County.  MWD Salt Lake & Sandy will get 28,600 acre-feet (9.3 Billion Gallons).

MWD Salt Lake & Sandy has so much extra water that “surplus” is being sold.  Wasatch County’s JSSD bought 3,000 acre-feet plus 2,000 acre-feet from Salt Lake City totaling 5,000 acre-feet.  After JSSD pays for and uses the water, 80% or about 4,000 acre-feet return flow back to the Provo River and Deer Creek where it is re-captured by SLC’s PRWUA and sold again.  Since JSSD paid the water, why wouldn’t JSSD obtain the value of the return flows?  This is a very odd double tax upon the public.

“During the year ended June 30, 2007, the Water Utility Fund (an enterprise fund) paid $8,190,506 for water purchased from the Metropolitan Water District of Salt Lake City and Sandy, which is a related entity of the City.” SLC 2007 CAFR page 76.

The Metropolitan Water District Salt Lake & Sandy tax rate on Salt Lake City taxable property is .000350, and the CUP tax rate is .000357.

$5,316,778.95 is the Metropolitan Water District estimated tax assessed against City taxable property in fiscal year 2007. (Based on 2007 SLC CAFR assessed and estimated actual value of taxable property of $15,190,797,000 or 15.19 Billion Dollars.)

$5,423,114.53 is the CUP estimated tax assessed against City taxable property in fiscal year 2007. (Based on 2007 SLC CAFR assessed and estimated actual value of taxable property of $15,190,797,000 or 15.19 Billion Dollars.)

“The conflict, in part, centered on the independence of the board of directors and the
elected officials of Salt Lake City, embodied in Water Commissioner George G. Keyser.
First, a creation of the Salt Lake City, the district was formed to participate in the Deer
Creek Project, but as time passed, the board began to make decisions that were viewed as
contrary to Salt Lake City’s best interests.”

“District files on Salt Lake City’s water rights: The first volley was the district filing on 30 to 60 second feet of water rights in Big and Little Cottonwood creeks and all other waters in southeastern Salt Lake County. The City already had long-standing exchange
agreements for the same water rights. The district filed Exchange Application numbers 35-46, triggering an outburst of hostilities with the City.16 The district’s applications were
published on August 20, 1940 for the purpose of exchanging water which would “spill” from Deer Creek reservoir into Utah Lake in the future, for culinary water from the ditches.
The filings caught the City off-guard, as the district had filed
them without prior consultation with city officials.”  The Metropolitan Water District of Salt Lake City Provo River Project-Deer Creek Reservoir page 18.

The city even had to sue its own water district manned by all city appointed directors:  Salt Lake City v. Metropolitan Water District 13 Utah 2d.

Salt Lake City appoints 5 members of the MWD SLS 7 member board, yet “REQUEST NO. 7: Admit that you control the Metropolitan Water District of Salt Lake and Sandy.  ANSWER: Deny.” February 12, 2006.

5 of 7 is 71.4% .  71.4% generally would be a controlling interest for any voting organization.

In FY 2006 Metropolitan Water District Salt Lake & Sandy water tax created a  charged of $5,316,779 Salt Lake City property and a charge o f $1,803,866 on Sandy City property. The current tax rate is .00035.

How independent is the Salt Lake City water department?  Salt Lake City v. Metropolitan Water District 13 Utah 2d 325 (1962) is an indication that the tail is wagging the dog.

Metropolitan Water District of Salt Lake City Resolution No. 1633 annexed Sandy City into the district. The Board of Directors was expanded to comprise seven (7) members of which five (5) members shall be appointed by the Salt Lake City  Council and two (2) members shall be appointed by the Sandy City Council.

Sandy City paid approximately $8,000,000 dollars to join the MWD and received the preferred right to purchase 7,940 acre-feet of water, 7,237.95 acre-feet of well water 57-2401 (A25558a), and the benefits of capital improvements of $8,000,000, etc.. (This is based on limited information provided under Grama request; however, the record may not be clear.

“This District and Salt Lake City shall enter into an inter-local agreement to provide for the construction and ownership of such designated pipelines by Salt Lake City.  The $2,500,000 paid towards the cost of such designated pipelines shall become a general obligation of this District.” Page 3 lines 12-17

“This District shall enter into an inter-local agreement with Salt Lake City to provide for the acquisition by this District of Salt Lake City’s Little Cottonwood well situated at approximately 2300 East and Little Cottonwood Creek and Richards Ditch well situated at approximately 2700 East and Little Cottonwood Creek, together with 2,000 AF annually of water rights therein, under an exchange of water rights and facilities of equal use value in accordance with Article XI, Section 6 of the Constitution of Utah.” Resolution No. 1633 Pargraph 10 lines 1 thru 9.

“This District shall enter into an inter-local agreement with Sandy City to sell to Sandy City the two wells, together with 2,000 AF annually of water rights therein for the sum of $250,000.” Resolution No. 1633 Page 8 lines 16-20  On February 8, 1990 Metropolitan Water District of Salt Lake City assigned 2,000 acre-feet of 57-8903 (A25558ba) to

Sandy City which claimed in November 24, 1954 at the A25558 water hearing held in the Governor’s Office: “Mr. A. C. Melville, attorney, stated that he objects to the application on the grounds that it is for purposes of monopoly and speculation.”

“That it is entirely speculative whether Salt Lake City will ever grow to a point where it can or will use the water which it and Metropolitan Water District have already appropriated and acquired; that Salt Lake City is maintaining water filings for storage projects and other projects in Mill Creek and Big and Little Cottonwood Creeks, and that any attempt to appropriate more water can only be for the purpose of monopolizing the water supplies, and is speculative as to future water need or the existence of a future beneficial use,” Edward W. Clyde August 3, 1954 Protest on A25558

It appears Mr. A. C. Melville & Mr. Edward W. Clyde were correct, because MWD Salt Lake City subsequently sold a un-needed 2,000 acre-feet of A25558ab to the Protestant, Sandy City in February 8, 1990 as part of a $250,000 transaction, and another un-needed 7,237.95 acre-feet of A25558a in March 28, 1994 as part of an 8 million dollar transaction.

It appears from the documents that Sandy City bought 9,237.95 acre-feet of well water from Metropolitan Water District of Salt Lake City’s 1954 application to appropriate water for its future need as part of an $8,250,000 water transaction.

Big Cottonwood Tanner protested the application: “That the applicant now and for some time has been attempting to dispose of surplus water of the applicant which it has from the Deer Creek project and the Provo River system.”

“That is does not now have use for nor can it without leasing and use far outside the district of the applicant, dispose of or make use of the water it now owns.” Big Tanner was correct.  Today SLC sells 20 million worth of water outside its corporate limits in Salt Lake County, and sold $414,000 worth of water in Wasatch County.

“REQUEST NO. 6: Admit that the majority of your water comes from outside Salt Lake County water sources.  ANSWER: Deny.”  If SLC purchased 50,000 acre-feet of water from MWD SLS’s 61,700 acre-feet of Deer Creek and CUP contracts for ULS and Bonneville Unit water, then isn’t it a fair statement to say, the majority of SLC’s drinking water comes from outside Salt Lake County if total water sales were approximately 75,000 acre-feet for inside city and outside city corporate limit water sales?

The District owns 61,700 acre-feet of Deer Creek, 20,000 Bonneville Unit CUP, and 8,600 acre-feet of Utah Lake System CUP contracts, 3,100 acre-feet of Dell Reservoir, and other 219.24 water shares.  Excepting the 3,100 acre-feet of Dell Reservoir water, MWD SLS owns 90,300 acre-feet are stored water outside Salt Lake County and outside most of the 24,000+ acres of “watershed protection lands” owned by Salt Lake City in the 7 Wasatch canyons in Salt Lake County.

To put 90,300 acre-feet into perspective, Salt Lake City in city use for 2005 was 47,574 acre-feet on a population of 178,099.  By 2050, Salt Lake City is estimated to increase about 25% to 225,066 together with water conservation decrease of 25%.  It is a fair statement to say that Metro Salt Lake has enough water outside Salt Lake County to exceed Salt Lake City’s water needs for the next hundreds of years.

MWD Salt Lake sold water rights on one hand, and made “Application For Financial Assistance” on the other hand to purchase water rights.  What’s the story?

Notes from 1954 water hearing held in Utah Governor’s Office:

“In answer to a series of questions posed by Mr. Edward W. Clyde, attorney, Dr. Marsell [MWD SLC] stated that he did not know the total quantity of unappropriated water in the basin.  He stated that there is, however, at least 10 times the quantity sought to be appropriated under this application.[if correct, that would be 361,897.5 acre-feet of unappropriated water in the basin as of 1954]. In answer to a series of questions posed by Mr. Clyde, Mr. Harris [MWD SLC] stated that the applicant has not monopolized all of the water since there is a surplus over and above the 50 sec.-ft asked for.” page 6 of hearing record.

“Mr. Harris [representing MWD Salt Lake City] stated that the primary purpose was not to serve water outside of Salt Lake City.” page 6 hearing record

“Although the Metropolitan Water District of Salt Lake City is a separate entity, the city is the alter ego of the District.” page 9 of hearing record

“After some discussion Mr. Clyde stated that he would furnish a tabulation of the water filings of Salt Lake City” page 8 of hearing record.

No water tabulation appears to have been entered into the record.

“It [MWD Salt Lake City] is the alter ego actually of Salt Lake City.” Charles Wilson February 11, 1981

“In order for Salt Lake City to participate in the Deer Creek Project, it was necessary for the City to set up an independent governmental entity to proxy for the City.” The Metropolitan Water District of Salt Lake City–Provo River Project-Deer Creek Reservoir

“All features of the Deer Creek Division are operated and maintained by the Provo River Water Users Association. The Metropolitan Water District of Salt Lake City operates and maintains the aqueduct system.” BOR 2008 website