Voting Rights And Prices At Heart of Failed Negotiations Between Ashley Valley Water And Central Irrigation Company
Two recent Q&A sessions with the candidates for the Ashley Valley Water and Sewer Improvement District board made one thing very clear: the topic of water rights and purchases is complex and anything but clear. A lawsuit in which Ashley Valley Water District claims the Ashley Central Irrigation Company is in breach of contract when it comes to the District’s ability to purchase water for culinary use was a focus at both of the candidate Q&A sessions. With Brownie Tomlinson and Boyd Workman, the incumbent board members of the 2 open board seats, running for reelection, and Wayne Simper, the President of the Central Irrigation Company, also running, these meetings provided an opportunity to try and understand what is preventing negotiations between the District and Irrigation Company. In simplest terms, the organizations have not been able to agree on voting rights and price, resulting in the lawsuit and standstill in negotiations. Statements made during the October 9th Q&A on this topic, are shared below:
From a statement read by Ashley Valley Water and Sewer Improvement District Manager Ryan Goodrich during the October 9th Q&A Session:
“The district was formed in 1974, and didn’t deliver its first water until the 1980s. The vast majority of the district’s water rights and shares come from a lawsuit with Vernal City, and the subsequent ‘Separation Agreement.’ The district then built a water treatment facility in 1984. 30 years later the district built a new treatment facility and tore down the original.
In the early days of the district water was required to be dedicated for new development. This practice was active until the early 1990s when the irrigation companies enacted policies to prevent transfer of water shares into the district name.
In 2014 the district acquired the last available block of Red Fleet water available to them, adding an additional 1120 acre feet of water to the already owned 500 acre feet. All of the growth that has occurred in the district since the separation agreement has relied on the water from that agreement, and the red fleet purchase.
In 2023 the district placed a 6 month moratorium on new connection while it performed a comprehensive study on its existing water rights. In September of 2023, the board passed a new Water Rights for Development Dedication Policy and the moratorium was lifted. The new policy requires water to be dedicated for development to occur. If the dedication is in the form of water shares from an irrigation company, those shares cannot have restrictions, or differing assessments.
A couple of years ago the irrigation companies changed their policies to allow for the district to finally transfer water shared into their name, but also stripped the voting rights from those future share transfers, and have proposed a higher assessment on those shares.”
Wayne Simper when asked about the Canal Companies removing voting rights for culinary water purchases:
“We saw the future of what was going to take place, that they(AVWSID) were going to need irrigation water in order to sustain the growth in the valley. So as the irrigation companies got thinking about it, we thought we’ve got to help the situation and give the shares they need but we were also concerned about protecting our companies, making sure we still had control of our companies. In the 1983 agreement… it states right in there that canal companies can designate different classes of shares for culinary/domestic use and then set the parameters in policies of how those shares are handled. So we decided in order to keep control of our companies and still allow AVWSID to take those shares we would make those shares non-voting. That’s where the non-voting portion came from. It’s right in line with what’s in the 1983 agreement. It states in there that we are able to do that. Mr. Mckeachnie developed several bylaws and articles from different companies to already make that change in 83’ and 84’ but it never was adopted so we decided a few years ago to adopt those policies to allow AVWSID to take those shares to use the water…Another point of reference, they(AVWSID) mentioned that they’ve received Red Fleet water as a block of water. There’s no voting rights with that Red Fleet water whatsoever. They have no control over that water. It’s a simple block of water purchased with no voting rights. They say they won’t take in water now without voting rights but they continue to take S-Stock water in which has no voting rights. They continue to take Ashley Valley Reservoir water in which they have 1 vote for the shareholder. It doesn’t matter how many more shares [purchased], they don’t get any more voting rights with Ashley Valley Reservoir water. So it doesn’t make sense for them to stop, put a moratorium on connections because they want to have voting rights. They personally said themselves that they don’t want to control our irrigation companies. Their attorney came out to one of our shareholder meetings and specifically said at that meeting that they were going to own all the water and the company someday and to deal with it. That didn’t sit well with the shareholders or anybody else in the meeting so that’s where the voting rights [change] came from. The reason for it is so the canal companies continue to have control of their canal companies without having a government entity overtake and control their companies. [Question: Do they maintain previous voting rights?] Yes. They maintain all the previous voting rights.”
Wayne Simper when asked about the Canal Companies increasing prices on culinary water purchases:
“We have proposed 2 to 3 times assessments for domestic and industrial use over the irrigation use which is common practice all over the state of Utah. …We gave Ashley Valley board a list of multiple irrigation companies across the state that do the exact same thing…The assessment is minimal per customer…Shareholders Assessment Act of Utah protects them from us raising the rates above what is equitable. We can’t charge something that’s not equitable. They have a different right than the irrigators have. They use their water differently than irrigators. They have a different time frame they get to use their water. The other shareholders are subject to an allotment the director sets, these guys don’t. They have a percentage of the creek flow April 1 to October 31. None of the other shareholders have that benefit. It is a differential assessment because it’s a differential use. It’s clearly stated in state law that’s how it’s supposed to be.”
