State legal counsel presented a draft third‑party contract the Utah Board of Water Resources would use when users of the Green River Block water right file fixed‑time change applications to participate in programs such as the Colorado River demand‑management pilot.
Sarah Schechter, attorney with the Utah Attorney General's Office, told the board the contract implements the state's exchange agreement with the Bureau of Reclamation and requires a third party to reimburse two charges: an annual contract rate and an operation‑and‑maintenance assessment. "The annual payment is based on two rates," she said, "the annual contract rate, which is multiplied by the number of acre feet depleted each year, and an operation and maintenance cost fee, which amount is equal to $3.37 per acre foot."
The draft before the board would be used when a change application triggers the exchange agreement's requirement for third‑party commitments. Schechter said the contracts are customary under the exchange because the state's Green River Block benefits from releases from Flaming Gorge that produce a steadier flow and, therefore, development advantages for assignees.
Board members pressed for clarifications about how the charges would apply in conservation programs. William Merkley, who represents the Green River District, said he was concerned a fee could look like a penalty to a participant in a conservation program. "It almost seemed like a penalty," Merkley said, and asked whether the state could reduce the perceived disincentive for participants in demand‑management efforts.
Schlechter and division staff responded that the fees are charged only on depletions associated with changed uses after 2019 and that in the draft form for the applicant discussed in the briefing, the conservation program yields zero depletions under the changed use so the estimated fee amount would be zero for that participant. Director Candace Hosnager and staff said they would seek a follow‑up meeting with the Bureau of Reclamation to align expectations and to consider how the requirement might affect future programs that use change applications (for example, water banking and ag optimization projects).
Board counsel asked the board to approve the contract "as to form" and authorize board officers to sign third‑party contracts as needs arise, so staff would not have to bring every contract back to the full board. Board member Merkley said he would make a motion in the formal meeting and indicated he would recuse himself from voting on any contract where the underlying water right had not yet been certificated in the district he represents.
Why it matters: The exchange agreement governs how Green River Block water can be used in conjunction with federal storage releases; the third‑party contracts would create an on‑going mechanism to collect federal charges from users whose change applications rely on those releases. Board members voiced concern that the requirement could discourage participation in voluntary conservation programs if the cumulative costs were not clearly understood.
What happens next: Staff asked for authorization to finalize the form and for the board to allow officers to execute individual contracts. Board members requested additional coordination with the Bureau of Reclamation and periodic updates when the board signs third‑party contracts so members know when and how many contracts are being executed.