Payson Locks In Reservoir Water Rights

Crowded council agenda includes the transfer from SRP of rights to 3,000 acre feet from Blue Ridge


Moments after the Payson Council on Thursday night accepted legal ownership of water in the Blue Ridge Reservoir, the handful of spectators broke into applause to celebrate the historic moment at the end of a 35-year struggle.

The brief celebration marked the official transfer of water rights for 3,000 acre-feet in the Blue Ridge Reservoir from the Salt River Project. The 3,000 acre-feet will more than double the town’s water supply, once Payson constructs a $30 million pipeline to deliver it.

“Thirty-five years led up to this,” said Payson’s water department director Buzz Walker, who played a leading role in the long quest. “This should secure the Town of Payson’s water rights forever.”

He took care to credit the town’s legal department and other town staff and community leaders for the “big team effort.”

SRP acquired rights to some 11,000 acre-feet in the deep reservoir atop the Mogollon Rim in a complicated swap of water rights with the mining company that originally created the reservoir.

Under the terms of a federal law, SRP then transferred some of its rights to Payson. SRP has yet to negotiate terms for the transfer of another 500 acre-feet to other Northern Gila County water suppliers.

Payson must now build a pipeline to bring the water to town. The town is seeking grants to help offset the cost of that pipeline and Gila County recently offered to kick in $4 million to make sure the town builds a pipe big enough to carry the water for other communities as well.

The town had hoped to pay for the bulk of the pipeline with a $7,500-per-unit fee imposed on new housing units. However, experts on bonding recently told the town that it cannot use the promise of future impact fees to secure bonding. As a result, the town will likely have to promise to raise water rates or property taxes to secure the bonds — at least initially, said Councilor Mike Vogel after the meeting.

The impromptu celebration of the water rights transfer came in the midst of an eventful meeting, presided over by Vice Mayor Su Connell, in Mayor Kenny Evan’s absence.

Other actions of the council:

• Approved the $520,000 purchase of 3.25 acres next to the airport and a $110,000 annual option on 10.5 additional acres. The land is part of a recent exchange with the Forest Service and would be used for airport-related businesses. The council approved the purchase on a split vote, even though the town attorney said the town has no guarantee it will ultimately get a grant from the federal government to cover the cost.

• Approved a $3.4 million construction bond so developer Halle Jackman can start construction on luxury condominiums just off Main Street, in a project that will reportedly include the state’s largest artificial waterfall.

• Canceled all leases and agreements with the developer of a proposed convention center hotel on about 11 acres of town-owned land next to the rodeo grounds.

• Approved the first reading of an ordinance that would charge sales-tax-like permit fees for any out-of-town businesses that sell merchandise in the town limits.

• Approved changes in impact fees, but agreed to further study what the water infrastructure impact fees should be for apartments and multi-family housing.


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