Wolf Creek files eminent domain action against Summit

Saturday , May 16, 2015 - 10:28 AM

EDEN — The Wolf Creek Water & Sewer Improvement District has launched eminent domain proceedings against Summit in an effort to gain control of the land on which the district’s sewer treatment plant, lagoons and irrigation pond sit.

The action was filed in Ogden’s 2nd District Court on May 8, and the district’s board sent a letter to its almost 1,000 subscribers on May 11, concerning ongoing struggles with Summit, the collective that purchased Powder Mountain in 2013 with plans to develop it in phases.

“There are quite a few issues concerning Wolf Creek Water & Sewer Improvement District in the news at the moment, and we want to keep you all informed of the facts and try to dispel some of the rumors,” the three-page letter said, assuring its water and sewer users that “we have no plans to increase water rates at this time.”

Dam study stalls due to conflict

One such issue involves a dam safety study that the state asked the district to conduct a few years ago.

“The purpose of the study will be to assess the dam and confirm that it is properly constructed and safe for downstream residents in case of natural disasters such as earthquakes or flooding,” the letter said.

That study stalled because Summit owns the land on which the dam sits, not the district. The dam forms the 10-acre irrigation water storage lake immediately south of Wolf Creek’s treatment plant.

In 2012, Summit purchased the five to six acres occupied by the district at auction after Wolf Creek Resort went bankrupt. Prior to that sale, the district leased the land from Wolf Creek Properties at a cost of $1 per year for 99 years (all pre-paid). The lease included language that required the district to pay taxes on the land, even though it is now tax-exempt.

In 2007, the district’s 9,500-square-foot membrane bioreactor sewage treatment plant was constructed using a $5 million state loan.

During its April 9 meeting, district board members voted to use eminent domain against Summit. A day earlier, Summit had delivered a letter to the district, terminating its lease due to unpaid taxes and instructing the district to surrender the land in good order and condition.

Summit Chief Operating Officer and General Counsel Paul Strange had scoffed at the district’s offer to buy the land for $4,400 — its appraised value according to a letter from Jason Richards, the district’s attorney.

Reached by phone Thursday, Strange said Summit “will respond appropriately” to the eminent domain proceedings.

“I’ve been working diligently to discuss this matter with them, but unfortunately we didn’t reach a resolution. So they filed this action,” Strange said.

Board members said they tried to work with Summit in the past to get it done.

“We approached Summit and told them of the pending directive by the state of Utah to assure the dam was safe ... the state considers Summit to be the owners of the dam, but the water is ours and is needed by the district and Eden community,” the letter said. In 2013, Summit and the district shared the cost of an appraisal of the land under the dam, the wastewater treatment plant, lagoons and another 10 adjacent acres that could one day be used for expansion.

“Summit verbally accepted our offer ... The district drew up papers and a check to Summit, but they failed to show at the scheduled meeting and never completed the agreed upon transaction,” the board’s letter told subscribers.

That $97,000 check never got cashed, and the dam dilemma continues to fester to this day.

Summit seeks future sewer connections 

According to Strange, that original offer occurred before he joined Summit. But he said that in 2014 and also earlier this year, Summit offered to move forward with that transaction. 

“My understanding was that it included sewer connections (for Powder Mountain),” Strange said. “My understanding is that was always part of the deal.”

However, the two parties remain at odds over details of those connections. But Strange asserts that the Wolf Creek treatment plant is required to serve as a regional wastewater treatment facility and offer service to all that request it.

“That’s all we asked for, in addition to fair compensation for our property,” Strange said.

According to its letter to subscribers, Nordic Valley’s new owners approached the district last year “with a plan to run a pipeline across the valley to our state of the art sewer plant.” 

“As we are operating the plant currently at half capacity, and are obligated by the state of Utah to accept new north valley developers requesting service, we have entered into an agreement to take their wastewater. The total cost of running a pipeline and all associated connection costs will be borne by the developer,” the letter said.

But no similar meeting of the minds has occurred with Summit, and district board member Jim Halay underscored the need to acquire the land in order to conduct the overdue dam study.

“We’ve had a budget item for the dam study for about four years,” Halay said.

The recent eminent domain proceedings do not include the 10 acres for future expansion.

“We’re not trying to take something we don’t need through eminent domain,” Halay said.

Rising rates, depleted savings

On a related front, the district is part of a robust group of protesters who fear that Summit’s use of its new mountaintop Hidden Lake Well will interfere with water rights down below. The state engineer with Utah’s Division of Water Rights is expected to issue its decision on Summit’s April 2014 exchange application by early summer.

Both sides have shelled out significant cash for professional studies and legal fees.

“A protesting group, consisting of Ogden Valley water companies including the district, mutual irrigation companies, Cache County, and certain private water rights owners, have hired hydrogeologists and legal professionals with water rights expertise,” the district told its subscribers. “To date, the protesters have shared costs in the hundreds of thousands of dollars to defend and protect the historical rights to our water supply, particularly Wolf Creek.”

The district dipped into funds budgeted for water and sewer improvements, and those upgrades have now been put on hold, the letter added.

Eden Water Works — which services about 450 households in the upper Ogden Valley — recently had to raise monthly fees and empty out cash reserves to pay its share of the group’s engineering and legal costs. Wolf Creek Irrigation Co. was similarly affected, having to raise share rates and exhaust its small savings.

Strange said it was not Summit’s intent to drain protesters’ coffers.

“We shared information with folks prior to filing our exchange application, specifically so they could avoid the expense of protest,” Strange said.

Contact reporter Cathy McKitrick at 801-625-4214 or cmckitrick@standard.net. Follow her on Twitter at @catmck.

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