Payson Buys Water Credits


An issue that once thundered and roared, crept through Town Hall on cat paws Thursday Jan. 24 when the council agreed to buy back from a developer enough water credits to supply 97 homes.

The quiet vote to spend $388,000 to buy water credits the town can sell for nearly twice that amount constituted a last shot in a water war that once spurred headlines, protests, bitter debate -- and the incorporation of the Town of Star Valley.

The complications of developer Terra-Payson's plan to sell back to the town 97 water credits for $3,570 each, which the town can sell to future builders for about $7,500 each, had some audience members and councilors scratching their heads. Especially since the water credits will essentially expire in two years, if not sold.

"We're not issuing a lot of building permits these days," observed Councilor Andy Romance, noting that the normal 200-permit-per year pace dropped to 100 permits this year. "In essence, we either spend $388,000 now -- or spend nothing in 2010."

"We could avoid making the extra money, I guess," said Water Superintendent Buzz Walker.

Mayor Bob Edwards added, "there will surely be 97 credits sold" in the next two years. "We might as well make the money."

In the end, the council agreed and voted unanimously to make the deal.

The return to the town of the unassigned water credits was an outgrowth of the development of the Tower Well on the outskirts of town that provided enough new water for up to 1,000 Payson homes -- and provoked the incorporation of Star Valley on the assertion that the well would drain the area's future.

The developer paid for the well in return for 1,000 water credits, half of which he planned to sell to recover costs.

Walker subsequently assigned about 903 of those water credits to specific parcels, whose owners can then buy the credits from Terra-Payson, rather than pay the current $7,570 town fee.

So last week, the town bought back the 97 unassigned credits. If the town sells all the credits to new developers in the next two years, it will net about $346,000. That money would then help fund a pipeline to bring 3,500 acre-feet from the Blue Ridge Reservoir that would secure the town's long-term water supply, even in the face of extended drought.

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