Stevensville council approves perpetual easement, water-rights transfer to resolve 2011 mitigation shortfall

The Stevensville Town Council voted to approve a perpetual easement and the transfer of three mitigation water rights from the Reeves family, a move town counsel said is intended to cure a longstanding condition from a 2011 DNRC water-right permit.

Ross Miller, the town's water attorney, told the council the 2011 DNRC permit that authorized diversion for the Twin Creeks subdivision required mitigation by routing service (mitigation) water into a series of ponds and legally implementing an aquifer-recharge plan. ‘‘Diversion under this permit may not commence until the aquifer recharge plan is legally implemented,’’ Miller said, and he added that the mitigation system was never legally implemented after the original developer went bankrupt.

Miller said the negotiated easement would restore the town’s legal position: ‘‘We entered negotiations with the Reeves to acquire an easement to those ponds so that we would have legal access and legal occupancy to those mitigation ponds,’’ he said. The agreement also conveys three mitigation water rights to the town as part of the settlement.

Del Post, attorney for the Reeves family, said the property owners were not seeking an unjustified gain. ‘‘They’re giving a permanent perpetual easement to the town… They’re conveying these water rights that are significant. They’re very valuable,’’ Post said, adding that the family ‘‘care about this community’’ and viewed the settlement as fair.

Council members and counsel discussed bank liens and foreclosure risk. Miller said he reviewed the loan document and did not see language that would block the Reeves from granting the easement; other council members observed that a foreclosure could raise priority questions, but Miller and Post said the loan anticipates easements and that foreclosure would not likely nullify the town’s rights. The transcript records different legal perspectives on the theoretical risk; counsel characterized their view as an opinion based on the loan wording and Montana lien theory.

Financial terms discussed in the meeting included a $25,000 cash payment to the Reeves and the waiver of nine equivalent hookup fees (council staff estimated the lost hookup-fee revenue at roughly $50,000). Town staff and counsel told the council those negotiated costs were substantially lower than probable condemnation (eminent-domain) expenses, which they estimated could be roughly three times the negotiated amount.

At least one resident urged caution on water quality: Jim Vatisky asked whether the recharge ponds had been tested for PFAS and other contaminants and whether future uses (including application of biosolids) could introduce contaminants into the recharge system. The council did not record a technical testing plan in the transcript; staff and counsel acknowledged the public’s concern but did not present a testing schedule during the recorded discussion.

Janelle (staff) called the roll. Council member Gregg voted ‘‘Aye,’’ Barker voted ‘‘Aye,’’ Brown—while saying she preferred a subordination agreement—voted ‘‘Aye,’’ and Council member Smith voted ‘‘Aye.’’ The mayor announced the motion passed 4–0. The council recessed briefly so town and Reeves representatives could sign the agreement.

The agreement references the 2011 DNRC permit and attaches the permit abstract and lists of water-right exhibits; counsel said the attachments are part of the recorded easement documents. The council did not record in the transcript any follow-up schedule for water-quality testing, monitoring responsibilities, or a detailed implementation timeline after the vote.

What happens next: the signed easement and associated exhibits will be filed with appropriate recorders and, according to council practice noted in the meeting, the town will then hold and implement the transferred mitigation water rights. Any future legal challenge or foreclosure would be resolved according to property and water law; counsel indicated the town retains eminent-domain authority but chose the negotiated route for cost reasons.