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Southern Utah News Front Page: July 18, 2019
Kanab City Council approves sale of water
The crowd spilled out into the hallway at the Kanab City Library during last week’s City Council meeting where the council approved a 50 year contract to sell water to Southern Red Sands for their sand plant. Photo by Colette Cox.
By Joan Thacher
On July 9, the Kanab City Council met to make a decision on the sale of city water to Southern Red Sands (SRS). The meeting, held at the Kanab City Library, was standing room only, with almost 250 citizens in attendance, some of whom were left to stand in the hallway.
Mayor Robert Houston opened the meeting at 6:30 p.m., followed by a prayer by Scott Colson and the pledge. Agenda, minutes and vouchers were approved.
Next, the public comment period had two comments; one asking about the actual use and cost of city water; the second, requesting a more neutral opening prayer or a moment of silence, which might be more welcoming.
The comment period was interrupted by a resident requesting the meeting be moved to a larger venue because of the overflow of people in the hallway. But because the meeting was legally noticed for the library, Mayor Houston said, “We’re just going to continue with this meeting. If you want to leave, you can leave and let somebody else come in.”
After the public comment period, the council unanimously approved the appointment of Dave Owens to the Arts Board, with a term ending 12/31/2022.
Next, the mayor introduced Chad Staheli, CEO of SRS, who made a presentation of the sand mining project at Red Knoll. Red Knoll is about 10 miles north of Kanab.
He began his talk by stating, “We’ve been involved in this project for about 18 months. Spent the last eight months in discussions with the city about the purchase of water.”
Staheli went on to describe the 700,000 ton per year, 100 acre frac sand project which will be on SITLA land (School Institutional Trust Land Administration), which he described as “not public land, but essentially private land owned by the state.”
He explained, “The operation is simple – sand, water, drying.” The operation will mine sand to be used in the fracking industry as a proppant, primarily. The sand could also be used for a variety of other purposes.
Staheli made several assurances to the council and the audience. The first that the mine area would be reclaimed “as we go;” that most of the haul trucks would be pneumatic so there would be no “sand flying out;” and that SRS did not intend to mine the entire 13,000 acres of claims they control. He also stated, “we do everything we can to conserve water.”
He told the crowd and council that, “This sand is very clean, so the amount of water required for the current operation is 400 acre feet. We do not need the city water, but would like the city to participate. The city gets no tax base from this.”
The price SRS would be paying the city for water would be $2 for every 1,000 gallons.
Several times during the presentation, the mayor slammed down his gavel loudly to silence the audience. “I’m not going to have this!” He threatened to the vocal crowd.
Next, local engineer Tom Avant took the floor. He was asked to analyze the hydrologic studies and make a determination whether there was enough “surplus” water to supply the facility. As part of his presentation, he reported that the city golf course had used 61 million gallons of water to run, and SRS would be using 73 million gallons of city water. “Four hundred fifty acre feet per year, or 140 gallons per minute, will be what they need,” he explained.
He concluded that based on the studies, there was plenty of water.
Next, as promised for months by the mayor, hydrogeologists from Utah Geological Survey, Hugh Hurlow and Paul Inkenbrandt, made a brief presentation.
“This is not a study. We never did a study,” reported Inkenbrandt, as he showed the very basic drawdown calculations they had made through e-mail exchanges with the city. “I would not use this to make decisions,” he concluded.
After the three presentations, water attorney Rick Hafen went over the provisions of the Water Service Agreement between Kanab City and SRS. The agreement is posted on the utah.gov/pmn website.
Some of the terms are: the sale is for 600 acre feet / year, the price is $2/1000 gallons, with possible increases every five years, and will last for a period of 20 years, with automatic renewal for 30 more years. SRS will own the well.
Next, the mayor opened the public comment period on the proposal. The comments took almost two hours. There were 39 comments – 35 against the sale of water and the project, two in favor, and two on unrelated topics.
The mayor, once again, used his gavel liberally and loudly to keep each commenter to the designated three minutes. No exceptions.
Two lawyers, representing some in the audience, wished to speak longer using their clients surrendered three minutes. They were also held to only three minutes. One of them had come all the way from Wisconsin to share his experiences with the frac sand industry.
Many of the commenters asked the council to table their decision until further hydrological studies were completed.
Shortly before the end of public comment, an altercation broke out between local residents Mike Noel and Will James. Both were in line to make comments and appeared to be tussling over who would speak last. They were both escorted out by the attending law enforcement officers.
Finally, at about 9:30 p.m., the council began its deliberations. The mayor started by directing City Manager Joe Decker to read a letter in favor of the project by Lara Clayson, a resident and employee of the Kane County Water Conservancy District.
He then referenced two water studies that “nobody has ever talked about that describe the recharge rates in the aquifer.”
He held up Water Resource Investigation Report 90-4105 prepared by USGS & NPS (1992), which concludes the recharge by precipitation on the outcrop to the aquifer considering discharge is about 18,000 acre feet / year.
“Regardless of what we do here tonight, their project (SRS’s) will go forth,” he explained. “It’s really not Kanab City’s decision. If we do not join right now, we are potentially leaving $300,000/year maximum (600 acre feet / year) or at the 200 acre feet / year – their planning right now – $112,000/year. If the Water Conservancy District takes this and uses its water, we’re out and they’re still using our water.”
The mayor then directed each council member to share their position. Byard Kershaw began. He referred to the public’s pleas for additional water studies, saying, “One more report to get it right.” “Oh, yeah, and then we need one more.” “In the meantime, nothing gets done.” “Bureaucracy at its finest.”
Next, Jeff Yates deferred to Cody Howick, Kanab City Engineer, with a Bachelor’s in Civil Engineering, who talked again about the water supply, pumping capabilities and $13.4 million worth of improvements the city would need to make in the next 20 years.
After, Yates expressed concerns about the water agreement with SRS, especially with the Indemnity Clause. He turned to City Attorney Jeff Stott, asking, “Do you think the Indemnity Clause is sufficient to protect the city?”
The clause reads, ”City shall Indemnify and hold SRS, its officers, representatives, agents and assigns harmless from any claims arising as a result of the Parties entering into this Agreement.”
Stott responded, “I do think the indemnity clause should be taken out or reversed.” He went on to say, “My job is not to get political, but to watch out for the city’s interest. This is the city’s water. My job is also to think of the worst case scenario. Say there’s a 10-year drought, the mine starts to take water so that we run out of water. I would prefer the city had a contractual right to tell them (SRS) to stop using the water.”
After talk regarding the agreement ended, Yates concluded with, “I don’t want to be in a situation with the city where your political leaning or your industry determines whether we give you water service.”
Michael East then spoke at length. He admonished the attending public for making this about fracking. “Because we agree or don’t agree with fracking doesn’t mean we shouldn’t sell them water. We have lots of water.”
He went on to say, “It pisses me off beyond belief that our own attorney, who we involved in the whole process, is now saying I wish we had stronger language.”
Earlier Stott said he had only gotten a copy of the agreement last week.
East continued, expressing his opinion of the mine’s effect on tourism. “If we continue to put stupid signs on the corner of town that talk about NO FRACKING, tourists are going to see them and they are going to know what we have up there.”
The crowd responded with boos. Again the mayor’s gavel came down.
Council member Celeste Meyeres spoke briefly saying, “It goes against my conscience to pick favorites and choose which businesses I want to support and which businesses I’m going to condemn.”
Lastly, Arlon Chamberlain spoke saying he had gone back and forth on this. He felt confident the mine would not expand onto BLM land, and he felt there was plenty of water to be used. He thought the trucks wouldn’t be a problem, especially since the Navajo Power Plant’s fly ash trucks would soon cease coming through town. “The jobs will be good,” he said.
After final discussion, Yates made a motion to enter into the contract for water service with SRS, with the condition that the indemnity clause meet the satisfaction of the city attorney. Motion was seconded and passed unanimously.