Daggett County, Bureau of Reclamation begin hurried talks to renew Dutch John water service contract

Daggett County officials and Bureau of Reclamation staff met to review a redline draft renewing a 2001 water service contract that expires March 6, 2026, and to negotiate term length, price and use restrictions for the 1,000 acre‑feet of annual delivery dedicated to the town of Dutch John.

Reclamation compliance and water resources group chief Jeff Hardy said the original contract was a 25‑year agreement enacted under the Dutch John Federal Property Disposition and Assistance Act and that, unless renewed, the county would not have the contractual right to pull water from Flaming Gorge. "If we don't, then you don't have a contract at the time to pull water out of Flaming Gorge for the community of Dutch John, and I think we all agree that would probably be a bad thing," Hardy said, urging a quick schedule to finalize a renewal.

The renewal under discussion covers delivery of up to 1,000 acre‑feet per year from the county's larger 12,000 acre‑feet water right (water right no. 41‑3470), not transfer of water rights themselves. Town/county water staff member Trevor described infrastructure constraints that inform that cap: "we get on average 420 gallons per minute while the pumps are running," and the town recently added a 1,000,000‑gallon raw storage tank and a new treatment plant to improve delivery and storage.

A recurring negotiation point was language that prohibits sale or third‑party contracts for water outside the privatization area. Reclamation recommended keeping a clause that would require prior written Reclamation approval before the contractor can "enter into a contract with a third party to the sale of water outside of the boundaries of the area described in the privatization act." County representatives said their intent is not to sell water rights and that the 1,000 acre‑feet covered by this service contract is dedicated to municipal use in Dutch John; they asked that the contract secure town access if the county uses or leases other portions of the larger 12,000 acre‑feet.

Price and billing methodology emerged as another major open issue. Reclamation staff explained that the 2001 arrangement used the Colorado River short‑term MNI rate; because Colorado River Storage Project (CRSP) debt levels have risen since 2001, applying that method now would raise the short‑term rate to about $135.11 per acre‑foot. County officials said their current internal water billing has averaged roughly $50 per acre‑foot. Hardy said Reclamation will need to negotiate term, amortization and price, and suggested a closed session would allow bargaining positions on price to be discussed: "we will negotiate the term, 25, 40 years, whatever that is, and we will negotiate the price."

Reclamation also recommended updating financial safeguards in the contract. The original contingency fund of $18,000 was flagged as inadequate by several participants; county staff said the broader water system fund (fund 28) currently shows a balance on the order of $500,000 but that the contract contingency line item should be revisited and likely increased.

On contract form and mechanics, Reclamation said it removed portions of the 2001 whereas clauses that described the earlier transfer mechanics and produced a simplified redline draft for local review; Patricia (Reclamation counsel) will update standard federal contract exhibits. Reclamation signaled a preference for an escalation clause tied to inflation for any long term (for example 40 years) to prevent long‑term price erosion.

Next steps: participants agreed to exchange the electronic redline, for the county to develop a pricing proposal and for staff to consider a closed session to discuss negotiation strategy on price. Reclamation emphasized the schedule pressure: with the current contract expiring 03/06/2026, the parties aim to finalize and execute a renewal quickly to avoid any interruption in municipal service to Dutch John.