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Pullout proposal fuels water feud

A proposed law allowing residents of a municipality to withdraw from county improvement districts is providing more ammunition for the long-running water feud between Sandy city and the White City Water Improvement District.

HB194 would establish a procedure for municipal residents living within a service district to pull out, provided their cities can offer equivalent services and a majority of them vote to withdraw.Sponsored by Rep. Brian R. Allen, R-Cottonwood Heights, the bill is under heavy fire from White City Water officials and users who maintain the law fiscally threatens both the integrity and the future of a publicly owned water system.

Allen, who is careful to note the bill is a prototype for dealing with service conflicts between municipalities and county improvement districts throughout the state, said the proposed law is not directed at White City Water.

But he admits he's been shell shocked by the controversy, much of which stems from a long history of bitter skirmishes between Sandy and the water district - which serves both Sandy folks and the residents of unincorporated islands within the city commonly known as "White City."

The bill, which is not opposed by the Utah Association of Special Districts, has been passed in the House of Representatives and sits on the Senate's second-reading calendar awaiting debate.

With Senate Majority Whip Leonard Blackham shepherding the bill in the upper house, most observers believe it will pass this session with little trouble.

And that prospect is troubling to Paulina Flint, chairwoman of the White City Water board of trustees, who says a financial study shows the district will operate at a loss of Sandy residents opt out.

She said the anticipated loss of 57.4 percent of its revenues would force the district, which now charges user fees instead of taxes, to tax both remaining customers and all Sandy users who withdraw in order to pay off bonds used to purchase the water system in 1995.

That tax would amount to about $97 a year on a $150,000 home, according to financial analyst David Sanderson of Riverton.

But Allen said his bill has been carefully crafted to ensure service areas will be left economically intact when municipal residents opt out and indicated Sandy will have to cover any bond-related costs.

The lawmaker said the proposed law is aimed at a growing problem caused as cities continue to annex unincorporated areas that have traditionally been served by special service districts.

"That has caused duplications of service" and much conflict, Allen noted. "It doesn't make sense to have one government entity competing with another.

"The Legislature has traditionally held that the cities and counties are the best means of providing services," he said. "You are a resident of a city or county, but you're not a resident of a special district. You're a member.

"My bill will simply give people the option to choose which systems they want to serve them," Allen added. "And we've tried hard to come up with a systematic and orderly way for people to withdraw from a district if their city can provide the same service."

The main hole in that logic, said White City attorney Paul H. Ashton, is that only the Sandy residents can vote on withdrawal. Water users in the unincorporated parts of the district will have no say, despite the impact it may have on their system.

Ashton also said he's concerned HB194 does not provide for a feasibility study before the vote is taken, so any adverse impacts will not be determined until after a decision is made.

"It's essentially a blind vote," said Don Patocka, chairman of the White City Water Users Committee. "People won't even know if it's feasible or financially possible."

Ashton also is battling to have a "hold harmless" clause restored to the bill that was deleted during an earlier redrafting.

Allen said he's not opposed to the no-harm concept as long as it can be worded in a way that will satisfy bonding counsel and not damage the legislation.

That change won't placate water district officials, but it will eliminate some of the financial threat and provide some hope the district can remain viable if Sandy users vote to withdraw.

Flint called HB194 "a designer bill" aimed at White City in violation of constitutional prohibitions against special legislation - a claim the sponsor strongly denies.

"The White City/Sandy dispute is a non-issue to me," Allen said. "It is my intent that the rates and service of White City users remain the same, and our attorney said the bill is drafted to meet that need."

But Patoka contends that "a lot of Sandy and county residents in the water improvement area are opposed to this" bill.

"It was a grass-roots effort to even form the district in the first place," he added. "Originally, our objective was to keep politics out of water . . . and create the closest thing to a true public utility."

Judy Bell, Sandy City's public works director, said she believes Sandy residents will choose to leave the water district because of the city's lower rates.

At present, Sandy residents on White City water are being taxed by the city for Metropolitan Water District service they don't receive and are paying a monthly user fee that is about double Sandy's fee.

"It's ludicrous that this is happening," said Bell. "I have been out there personally, and I have not met one (city) person who wants to stay on White City water."

But the district has petitions signed by 177 Sandy residents and 238 county dwellers indicating opposition to HB194.

Bell estimates it will cost the city about $6 million to take over the share of water district debt owed by Sandy residents and another $200,000 to tie the White City lines currently supplying Sandy users to the city's system.

"I happen to be one of the people who is on this water, and I want off," she said. "Why shouldn't I have the right to self-determination?"

If a majority of city residents on White City water choose to continue that service, Bell said, Sandy mayor Tom Dolan has indicated he will not oppose that decision.