Water rights can cost Tooele City developers upwards of $15,000 per lot, but the city rarely charges the full fee, according to documents collected as evidence from an appeal that took place earlier this year.
That appeal, which the city heard at a special meeting in March, was initiated by Tooele resident Dave Davis Sr. Davis argued that, based on records of fees previously assessed by the city, the $17,256 he paid for water service to his new home was excessive and unfair.
According to those records, four developers have paid the city fees ranging from $6,570 to $19,320 for water service at a single-family residential home since 1998.
High prices
Provisions outlined in Tooele City Code limit the circumstances in which an individual home builder must pay for water rights. But when it does occur, the total charge could be much higher.
Tooele City Code sets the standard impact fee per each residential connection at $4,609, plus $15,000 per acre foot for municipal water rights. According to the code, these charges should cover the cost of providing water rights to new water users within the city.
Most individual home buyers never pay the actual assessed fees. Details related to water rights are usually worked out by the developer when land is subdivided for single-family lots. Generally, developers ensure water service at future residences through a processed called “conveyance,” where the developer gives water rights he already owns to the city in exchange for future municipal water service, according to the Tooele City Code.
However, if the developer does not have water rights to give the city, city code includes a provision for payment-in-lieu-of-conveyance according to a city-determined fee schedule.
Though conveyance, or payment-in-lieu-of-conveyance, is usually worked out during the subdivision process, the city may also attach conveyance requirements to certain building permits when necessary. The fees may be assessed with other permit costs when a developer intends to build on a single lot that has remained vacant for more than 12 months, according to city code.
Assuming a single residential connection and the purchase of a single acre foot of municipal water rights, the total for standard water-related charges on the development of a single vacant lot in Tooele City comes to $19,609.
Water records surface
The frequency, and fairness, with which the city has applied the payment-in-lieu-of-conveyance option, came into question earlier this year during the Davis appeal.
According to the original building permit, Davis had requested to construct a single-family home on an unoccupied .66 acre lot near Tooele High School. In accordance with Tooele City code, and the city’s most recent fee schedule, Davis was initially assessed a $41,524 fee for the payment-in-lieu-of-conveyance of 2.77 acre feet of municipal water. Additionally, Davis was assessed a $12,760 water impact fee, for a total charge of $54,284.
Davis was displeased with the size of those initial assessments, said Jim Bolser, Community Development and Public Works director for Tooele City.
“He balked at it, of course, because it’s a lot of money,” said Bolser.
The city wanted to work with him, Bolser said, so in accord with another chapter of city code, the public works department created an addendum to Davis’ building permit that would charge him for only a portion of the necessary water rights — if he agreed not to irrigate his entire lot.
The new fees worked out to a total of $13,200 for water rights, plus an impact fee of $4,056 for a total of $17,256.
Davis still did not seem entirely pleased with the concession, Bolser said, but ultimately signed the addendum and paid the associated fees in full. Construction started in July of last year, and the home was completed in August.
Two months later, Davis began filing a series of records requests asking for information related to water fees assessed of other developers. His investigation turned up hundreds, if not thousands, of pages of documents, all of which were presented during the appeal.
However, Davis did not immediately request an appeal. On Nov. 5, Davis sent the city a letter that asked for a full refund of the water-related fees and requested that the city abolish the addendum.
Davis would later characterize this Nov. 5 letter as a request for an appeal. City officials and documents hold that the city was unaware of Davis’ intent to appeal until last January.
On Jan. 15, Davis’ son, Dave Davis Jr., addressed the Tooele City Council during an open forum at a regularly scheduled public meeting, where he accused the city council of ignoring his father’s requested appeal, and claimed that Mayor Patrick Dunlavy had slapped him across the face. Dunlavy has said that he did touch Davis Jr.’s face, but Dunlavy said that he has known Davis Jr. for decades and intended the gesture as a joke. Davis Jr. has not filed formal charges and has made no further mention of the alleged assault.
However, Davis Sr. filed an official letter of appeal on Jan. 22. In a subsequent letter dated Jan. 24, he stated that he hoped to finalize a new agreement quickly, so he “could make a decision to plant or not to plant a garden or fruit trees.”
Davis also submitted a request for copies of any audio or visual recordings of the Jan. 15 meeting.
The Tooele City Council heard Davis’ official appeal during a special public hearing on March 3. On April 2, the council read a letter that formally denied Davis’ requested refund.
Davis could not be reached for comment. Mayor Dunlavy declined to comment on the appeal, and Brad Pratt, Tooele City Council chairman, said he felt the documents in the case stood for themselves and warranted no further comment.
Under Tooele City Code, appeal applicants do have a right to appeal to the Third Judicial District Court if their appeal is denied by the Tooele City Council. However, as of Tuesday, Davis has yet to file with the court.
Internal policy change
According to the council, Davis’ appeal was denied because it failed to demonstrate that the city overcharged him. The council held up the three other developers whom the city had charged for water rights as evidence in their favor.
Of the three developers who chose a payment-in-lieu-of-conveyance, one of them was charged a total of $19,320 in fees — $2,000 more than Davis, according to the appeal documents. The building permit in question involved a two-lot subdivision where the primary lot was already occupied by a home, but the newly-created secondary lot was left vacant.
Two others paid $6,570. The first received the discounted rate because the developer already had a sizable portion of water rights to convey to the city. However, the rights the city received were not deemed to be adequate to provide for the home’s future needs, so the developer chose to pay $2,250, plus the standard $4,320 impact fee, instead of conveying the entire amount of water rights required.
The second developer that paid $6,570 for water rights has an incomplete building permit file that does not detail the circumstances in which the discounted rate was awarded. Instead, the file includes a note that reads “1/2 acre foot to be purchased from city as per Gerald” in place of a more detailed fee calculation.
Bolser said he did not know why, in this particular case, a developer was charged just $2,250 for an unknown amount of water rights. The charge was issued in 2005, before Bolser took his current position with the city, and Bolser said he could find no official records indicating how the city tabulated the payment. He did say that he believed there may have been an oral agreement with the developer that became the basis for the charge.
According to an exchange detailed in the appeal documents, Bolser discovered that at some point the city had operated according to an unofficial, oral policy known as the “10-year rule.” This policy granted water rights for free, or at significantly discounted rates, to developers who demonstrated that a given lot had featured a home or otherwise had access to city utilities in the last 10 years.
Bolser formally abolished this policy in a memorandum, dated Oct. 17, after Davis and the mayor brought it to his attention. According to a letter from Tooele City Recorder Michelle Pitt, the memorandum is the only known record of the policy’s official existence.
Because the deal cut with Davis was an effective means of reducing the fees associated with payment-in-lieu-of-conveyance, and because it worked with the provisions provided by the city code, Bolser said his department had begun work on a series of proposed amendments to the city code that would allow future developers to more easily make use of the same exemption.
The proposal was intended to allow for more development of individual vacant lots currently located within Tooele City limits, Bolser said. However, in his letters to the city, Davis characterized the proposal as an attempt to cover up their previous actions and to try his appeal under a new code.
The city has not held any public discussions of the proposal since the Jan. 15 city council meeting.