Developers who purchase water from a privately held source in Star Valley might experience delays if the Payson Town Council votes to halt future development until a safe yield study is completed.
Councilor Su Connell's proposal sprang from a July 20 unanimous council decision to retain Clear Creek Associates of Scottsdale to determine whether the water pumped out of the aquifer underneath Star Valley and parts of Payson is coming out faster than it's going in.
"Any developments that would come from these source wells in question would be held from further work until the study of the Clear Creek (Associates) is returned to us," Connell said Thursday evening.
Mayor Bob Edwards and Councilor Ed Blair supported Connell's proposal.
"We hope to gain a clear understanding of that well in Star Valley," said Councilor Ed Blair. "I want to make sure we have adequate water resources."
The council authorized the town to spend no more than $50,000 on the report, which must be completed by Jan. 31, 2007.
Councilor Mike Vogel called Connell's proposal a moratorium, and expressed concerns about the town's liability if one is imposed.
A moratorium according to state law is: "Engaging in a pattern or practice of delaying or stopping issuance of permits, authorizations or approvals necessary for the subdivision and partitioning, or construction on, any land."
And it applies to projects in progress and future land development.
The statute allows for a moratorium after a municipality has provided compelling data that demonstrate a shortage of essential public facilities such as water, sewer and street improvements.
Connell's proposition created a stir among local builders and raised questions about the town's legal and fiduciary commitment to its contracts -- in particular, the much-contested Resolution 2098.
The question isn't a matter of whether or not you agree with the town's decision to pass the resolution, said Mike Hughes, a member of the mayor's affordable housing task force. The town has a legal commitment to fulfill its contractual obligations, Hughes added.
"The town entered into a contract," Hughes said. "Regardless how the study turns out. The town is liable for it."
Resolution 2098, executed in April 2005, is comprised of two separate agreements among the town of Payson, the development firm Terra-Payson 40 and landowners George Randall and Roy Haught.
Through various financial transactions and land conveyances, Terra-Payson 40 acquired 1,000 equivalent residential units -- or ERUs -- for new developments per town code. In turn, the firm sold those ERUs to other subdividers.
According to Fred Carpenter, town manager, 475 have already been allocated.
The ancillary contracts and economic impact linked to 2098 amount to millions of dollars.
Even if the Clear Creek study determines that safe yield can't be obtained in Star Valley, Vogel said the town is still bound to deliver that water to Terra-Capital, which in turn has contractual agreements with various builders who have legal obligations to subcontractors, suppliers and landowners.
As projects move through the process, they accumulate more legal barriers said Carpenter at a Citizens Awareness Committee meeting Tuesday.
"If a piece of property is zoned properly, if they follow the rules," he said. "It gets a little harder to stop."
Kevin Sokol's Boulder Ridge project relies on 2098 water.
Sokol, a developer, homebuilder and member of the town's planning and zoning commission, said recovering from a moratorium would take him years.
"A lot of people would lose their jobs," he said. "It's too difficult to find (subcontractors) up here. It's one industry you can't outsource."
The planning industry has a term for it: "Aspenizing."
"You're getting so affluent you can't live there," Carpenter said. "Nobody can live there."
Restrictive zoning in the celebrity-laden resort town of Aspen, Colo. priced out its work force. So, workers live in outlying communities and commute, some up to 100 miles a day.
Aside from economic development impediments -- such as a waning jobs and work force housing -- the town of Payson could also encounter legal challenges.
Contract holders could bring lawsuits against the town for breach of contract, or sue for damages under the moratorium statute and recoup attorneys fees.
The public is invited to attend a work study session regarding Connell's proposal at 4 p.m. Thursday, Aug. 3 at town hall.