Tuesday, November 29, 2016

Information meetings

Strawberry Water Users Association
Stockholders Information Meetings
Tuesday November 29th
Payson High School
7 P.M.
1050 South Main St.

Wednesday November 30th
Spanish Fork High School
Little Theater
7 P.M.
99 North 300 West

The board will be presenting additional information regarding the items
 identified in the previously mailed stockholder letter of concern and answer questions you may have going forward. We highly recommend you attend.

Thursday, November 3, 2016

Open letter to all Strawberry Stockholders

Dear Strawberry Stockholder,
We don’t generally send this type of correspondence to our stockholders, but we feel the chain of events that has played out over the last three years warrants your careful scrutiny of several issues that, if enacted, will negatively impact the association and your water rights. We intend to be fully transparent in all issues that affect you as a stockholder. The information in this letter and the documents we reference are an attempt to provide you with pertinent information that we as a board have studied and discussed. Because of their magnitude, we feel that we must notify you of the issues, appeals, and the negative consequences that may unfold going forward. 

In October of 2013 a request was made to the US Department of the Interior’s Office of Inspector General (OIG) asking for an operational audit of practices carried out by the association. The letter identified nine items to be investigated by the OIG. (The request was made jointly by the Strawberry High Line Canal Company, Payson City, Salem City and Spanish Fork City). (see http://swua16.blogspot.com). Of the items identified, the two that we feel are of great consequence are the redistribution of the rehabilitation and other funds that are used to repair irrigation facilities and the ownership/use of the power transmission line (used by SWUA, Springville, Spanish Fork, Salem and Payson Cities) as a continued revenue source for SWUA. (These funds are used to help reduce your assessment as much as $450,000 per year.)  As you may recall, the federal government already took the recreation and grazing rights of the stockholders as revenue sources when the reservoir project was turned over to Central Utah Water Conservancy District.

The OIG decided that this was outside of their scope of work, and the audit was assigned to the Provo Office of Bureau of Reclamation (BOR). During the past eighteen months, the BOR has been reviewing the issues outlined in the letter request. This review included interviews with selected personnel from the affected canal companies the association serves; however, the bureau has not contacted the association directly for any pertinent information regarding the issues raised in the audit request. All information collected by the BOR in relation to the audit was done so without SWUA input.

During this time, our legal counsel filed a Freedom of Information Request (FOIA) to gather pertinent information regarding the ongoing BOR audit. In doing so, several disturbing documents surfaced that we feel you need to consider. If implemented, they will greatly affect local control of your association as well as cost and benefits to the organization. Additionally, federal bureaucratic personnel as well as a lobbyist hired by the cities have continued to fuel the city’s efforts to gain certain assets that are controlled and owned by your association.

During this information gathering period, Commissioner Estevan Lopez suggested that this is a local issue and the local entities should get together with the complainants of the letter and try to see if some solutions could be mitigated, thus ending the process. SWUA as well as the canal companies sent formal letters to the Commissioner stating our willingness to participate in this process, but Spanish Fork, Salem, Payson Cities and Strawberry Highline Canal Company would not participate in mediation; therefore, this option was not pursued.
This audit process has never been used before for the intent that the proponents would like.  The audit process that has been instigated has the potential to fundamentally change the constitutional right to own private property.  This request has set in motion powerful forces within the Obama Administration to put in place a newly created Executive Authority for the express purpose of giving the Federal Government--in this case, the Bureau of Reclamation--the power to be judge, jury, and executioner and dictate who should own private property.
We have placed several documents on our blog site for your review (http://swua16.blogspot.com). These include the original audit request, a timeline of events that have transpired to date, and a copy of the FOIA memo recommending that Central Utah Water Conservancy district take over operations of the association. We strongly encourage you to read the linked documents. If you do not have internet online access you can call our office and we will mail you a copy of the referenced documents. We will update the online blog site as additional information comes forward.

After you have reviewed the online documents, we strongly encourage you to contact your SWUA district director if you have additional questions about how this will affect you as a stockholder and the association in general. We feel as a board of directors of the association that the outcome and recommendations of the BOR, if followed as stated in their memo, can and will have monumental, long-term negative impact on you as a stockholder in operational costs as well as local representation.
We hope that you will seriously consider the ramifications if additional bureaucratic interference continues to erode the association’s ability to direct the affairs on a local level.

SWUA Board of Directors

Tuesday, November 1, 2016

Freedom of Information Request(FOIA) Document from Larry Walkovuak, Upper Colorado River Regional Director suggesting that Strawberry Water Users Association be taken over by Central Utah Water Conservancy.

Internal Document – Pre-Decisional – Not for Public Release
To:        Director, Policy and Administration
             Attention: 84-
From:    LarryWalkoviak
             Upper Colorado Regional Director

Subject: Basis of Negotiation (BON) to Request Delegation of Authority (DA) to Negotiate the           Transfer of Operation and Maintenance Responsibilities in the Strawberry Valley Project from the Strawberry Water Users Association and the Strawberry High Line Canal Company to the Central Utah Water Conservancy District; Strawberry Valley Project, Utah.

A. Purpose of the Request: To request a delegation of the Commissioner of Reclamation’s authority to negotiate an amendatory contract to remove all operation and maintenance (O&M) responsibilities from the Strawberry Water Users Association (SWUA) and the Strawberry High Line Canal Company (SHLCC) and enter into an amendatory contract with the Central Utah Water Conservancy District (CUWCD) to accept O&M of all Strawberry Valley Project (SVP or Project) facilities (except maybe the laterals?).

B. Contracting Action: Execute an amendment to the Repayment Contract of 1965 between the Central Utah Water Conservancy District and the United States, for CUWCD to take over O&M of
all SVP facilities.

C. Contracting Entities: The CUWCD is a water conservancy district organized and existing under the laws of the State of Utah, which entered into Repayment Contract No. 14-06-400-4286 dated December 28, 1965 (Repayment Contract), with the United States to repay the construction costs, and accept O&M for the Bonneville Unit of the Central Utah Project (CUP).
D. Relevant Legal Authorities: The Reclamation Act of 1902 (32 Stat. 388), and the Reclamation Extension Act of 1914 (38 Stat. 687) allow for the transfer of O&M by the Secretary of the Interior to legal entities which are deemed capable to perform O&M responsibilities.
E. Project Background:
                                                                                                                              BOR 46kV 01972

The Secretary of the Interior authorized the SVP on December 15, 1905, under the provisions of the Reclamation Act of June 17, 1902. Primary Project facilities included the Strawberry Dam and Reservoir; the Strawberry Tunnel (a trans-basin diversion from the Colorado River drainage to the Great Salt Lake Basin); power generation, transmission, and diversion facilities; the Springville-Mapleton Lateral; and the Strawberry High Line Canal.

In 1906, the United States entered into a contract with the Strawberry Valley Water Users Association, providing for it to assess and collect payments from individual farmers for water received from the Project, with Reclamation retaining responsibility for water delivery and O&M. In 1916, the SHLCC accepted O&M of the High Line Canal, a distribution artery of the SVP carrying approximately 4/7 of all Project water. In 1918, the Springville-Mapleton Irrigation Company (SMIC) accepted O&M of the Springville-Mapleton Lateral which carried Project water from the Spanish Fork River north to Hobble Creek in Springville, UT. The remaining 3/7 of Project water is divided between the SMIC and various private canal companies which deliver Project and non-Project water in southern Utah County. Pursuant to the Fact-Finders Act of 1924, the SWUA was formed and in 1926 entered into a contract with Reclamation to take over repayment for the SVP as a whole, and O&M of Strawberry Dam and Reservoir, Strawberry Tunnel, a diversion dam on the Spanish Fork River, and the power generation, transmission, and distribution facilities; specifically excluding any O&M responsibilities for the Springville-Mapleton Lateral and High Line Canal. This contract was amended in 1928, 1940, and 1991. Under its 1926 contract, SWUA obtained Subsection I provisions of the 1924 Fact Finders Act, to use net revenues from the power plants, mineral leases, and grazing lands to assist in repaying construction costs and defraying O&M expenses for the Project.

In 1956, the Central Utah Project (CUP) was authorized under the Colorado River Storage Project Act. The Bonneville Unit of the CUP relies on additional trans-basin diversions from the Colorado River drainage into the Great Salt Lake Basin, and was designed to be laid on top of the SVP. In 1974, Soldier Creek Dam was completed as a feature of the CUP, which enlarged Strawberry Reservoir from approximately 280,000 AF to 1,100,000 AF. With the completion of Soldier Creek Dam and additional transmission and diversion features which duplicated previous SVP features, CUWCD became the O&M contractor for a majority of the Project features previously operated by SWUA. Reservoir operations relating to the CUP and SVP are outlined in Agreement No. 1-07-40-R1330 (1991 Agreement) dated July 29, 1991, which included a provision for 61,500 AF of water would be released annually with a 50,000 AF one-time bank which has been allocated to the recipient companies of SVP water.

In 2005, CUWCD took over OM&R of the Springville-Mapleton Lateral and accompanying diversion structure per Contract No. WS-04-150 dated March 15, 2005. In accordance with the Central Utah Project Completion Act, a joint funding agreement was executed to replace the Springville-Mapleton Lateral with an enclosed pipeline that would deliver water to the Springville and Mapleton Irrigation companies.

                                                                                                                                  BOR 46kV 0198

The CUWCD currently operates and maintains Reclamation facilities in six Utah counties, which include many major storage and regulating reservoirs, along with hundreds of miles of interconnecting conveyance systems equaling more than 2 billion dollars in asset value.

F.      Proposed Contract Terms and Conditions:

1. Operation and Maintenance: Reclamation is requesting authority to terminate the O&M provisions of SWUA’s and SHLCC’s contracts and transfer O&M of remaining SVP facilities from the SHLCC to the Central Utah Water Conservancy District, by way of an amendatory contract. Per the proposed contract, CUWCD will become the successor-in-interest for all O&M activities within the Project.

2. Water Delivery: In the amendatory contract, CUWCD will continue delivering water to the SMIC, SHLCC, and the canal companies which deliver Spanish Fork River water, as well as Project water, based on conveyance, carriage, and delivery rights as outlined in previous SVP agreements. All entities with water delivery contracts currently with SWUA, and SHLCC, will now look solely to Central Utah Water Conservancy District for delivery of Project water (Aug 5, 1942, Contract w/ SHLCC).

3. Water Bank: The 1991 Agreement created a 50,000 AF water bank which could be drawn down and refilled by the participants of the SVP. SWUA, SHLCC, SMIC, and the associated river companies would continue to operate the bank in accordance with the 1991 Agreement; the water would be delivered by CUWCD.

4. Direct Flow Rights: Direct flow rights in the Spanish Fork River would be unchanged. The only modification would be the assessments would be paid to CUWCD instead of to SWUA.

5. Return Flows: All Project return flows would revert back to the United States. (Would we place these rights with CUWCD or keep them for future use?)

6. Subsection I Revenues: All subsection I revenues would accrue to the operation and maintenance entity of the SVP. Compensation in the amount of XXXX would be required to make SWUA and SHLCC whole. Calculated on X interest rate for 50 years – PV.

7. SWUA / SHLCC Staff: CUWCD will strive to find positions for current staff members of the SWUA and SHLCC. (Don’t know if this needs to be in an amendatory contract)

8. Laterals: (Do we wish to leave O&M of the laterals with HL?)

9. OM&R Assessments: CUWCD will be responsible for operation, maintenance, and replacement of all current and future SVP facilities (do we exempt laterals and leave with SHLCC?). Project recipients will pay CUWCD annually for their proportionate shares of water delivered.
BOR 46kV 0199

10. Power Transmission System: Currently the SWUA has a long-term agreement with Southern Utah Valley Power System group for O&M of the 46kV Project Transmission Line. Reclamation requests permission to make that agreement permanent in this proposed contract.

G.      Stipulations:

1. NEPA Compliance: For transfers of O&M?

2. Previous Commitments: Any and all existing commitments and obligations between the shareholders in SWUA and SHLCC will remain in force unless modified in this Agreement.

3. Conversion: Reclamation will act in accordance with PEC P-05 and PEC-P09 for conversions of project water from irrigation to other purposes.

4. Irrigation Season: Do we wish to change the dates from April 1 to October 1 of each year?

5. Carriage – Same as other CUP facilities as provided by CUPCA.

6. Public Participation: Reclamation is accommodating public participation through the NEPA / contracting process.

7. Standard Articles: Same as O&M Std Articles

8. Office of the Solicitor finding of Sufficiency: This BON has been reviewed for legal sufficiency and has been approved by the Office of the Regional Solicitor.
If you have any questions, please contact Mr. Jeff Painter of my staff at 801 524-3711 or
Mr. Jeff Hearty in the Provo Area Office at 801 379-1221.

Concerns that SWUA water undercuts value of CUP water

Monday, October 31, 2016

SWUA constructed time line of events and discusions

September 5, 1997 US BOR/Department of the Interior "Issue Paper" written by US BOR/Department of the Interior Legal Team to outline "Strawberry Valley Project Conversion from Irrigation to Municipal and Industrial Water"
SUVMUA Sign Contract with CUWCD (After working with SWUA to sign a contract)
BOR Refusal to work on Diamond Fork Power following passage of the Bonneville Unit Clean Hydropower Facilitation Act by Congress and signed into Law by the President on July 18, 2013
2013 CUWCD Requests the CUPCA Office to take responsibility of SVP and amend repayment contracts in November 7, 2013 document titled, "Central Utah Water Project Redefining Relationships which was presented to Department of the Interior Assistant Secretary Anne Castle dated November 7, 2013
2013 Cities and SHLCC Request an audit of SWUA in October 23, 2013 letter to the US Department of the Interior.  Purpose of the Audit is to establish a process by which the Department of the Interior would determine who owns private assets i.e. land, water, money currently owned and controlled by the SWUA
BOR creates outline for Steps to assign SWUA contracts to CUWCD and Others
2015-01-28 Meeting between BOR and CUWCD on Audit.  It is suggested by the parties that the BOR needs to be more aggressive toward SWUA.  (Also suggests SWUA's Banked water is illegal.)
2015 BOR drafts Letter to Assign OM&R of 46KV line to SUVPS
2015 BOR Memo to Transfer OM&R from SWUA & SHLCC to CUWCD
2016 BOR suggests legislation that will allow disposal of Project lands to be sold or given to other projects.  (No permission would be needed from repayment entity in charge of the project)
Mayors Push to have the audit and then do ADR.  (My conversation with Owen Walker states that the BOR will enforce anything that is their interpretation of the Contracts)