Woodland Hills adopts fee‑in‑lieu option for water rights; city keeps authority to require rights later

Woodland Hills, Utah — The Woodland Hills City Council voted unanimously Oct. 14 to adopt an ordinance that allows developers to pay a fee in lieu of bringing individual water rights to the city for new developments.

The change (ordinance 2025‑34) amends municipal code section 8‑5‑1 to create a city-administered option. Ted Mickelson, representing the city’s public works and fire operations, explained the policy and why staff proposed it: Woodland Hills currently holds excess water rights and must show “beneficial use” of those rights to retain them under state practice. Allowing a fee-in-lieu option enables developers to pay the city instead of conveying separate water shares, while giving the city flexibility to reserve or return to a different policy later.

Why it matters: Municipal water rights are a limited resource in Utah. Staff said the option creates a way for the city to allocate excess rights without permanently transferring ownership off the city’s books, to generate revenue tied to development, and to demonstrate beneficial use under state requirements.

Ted described the mechanics and constraints: the city can offer developers either option — to bring their own water rights or to pay the city’s fee. “We can either allow developers to bring them or they can buy a like, a lease from the city,” Ted said. He emphasized the city cannot sell its water rights for use outside the city: “We can’t sell water rights outside the city. The water rights that the city has now has to stay dedicated to our city,” he said.

Council members asked about the city’s current supply and build-out needs. Ted said preliminary numbers indicate the city holds “probably about twice as many as we need right now” for current demand; he and others cited a rough ballpark of “about 800-ish acre-feet” in the city’s holdings with build-out estimates in the 890–900 acre-feet neighborhood, noting the final technical numbers remain under review.

The ordinance keeps developer choice available: the city will offer the fee-in-lieu option but can discontinue that option in the future if growth or water-use projections indicate the city should retain more rights. Staff called this an administrative tool rather than a permanent sale of municipal water resources.

Vote: The council adopted ordinance 2025‑34 on a unanimous roll call (Council members Lundt, Hilliard, Hutchings, Malkovich and Kinston voted yes).

Ending: Staff said they will refine the technical water-rights inventory and report back if the city needs to change course. The newly adopted code language gives the city a temporary administrative path to allocate excess water rights to development while preserving the city’s long-term control over municipal water resources.