HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/05/2022 - FIRST READING OF ORDINANCE NO. 083, 2022, AUTHORIZ Agenda Item 9
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AGENDA ITEM SUMMARY July 5, 2022
City Council
STAFF
Tawnya Ernst, Sr. Real Estate Specialist
Jason Graham, Director of Water Utilities
Ryan Malarky, Legal
SUBJECT
First Reading of Ordinance No. 083, 2022, Authorizing the Acquisition by Eminent Domain Proceedings of
Certain Property Rights Necessary for Phase 2 (Construction) and Phase 3 (Operations and Maintenance) of
the Halligan Water Supply Project.
EXECUTIVE SUMMARY
The purpose of this item is to seek authorization from Council to use eminent domain to acquire property rights
for construction (Phase 2) and long-term maintenance and operations access (Phase 3) of the Halligan Water
Supply Project (Halligan Project) across private property that provides the primary access point to Halligan
Reservoir. This property is jointly owned by Geo A. Henderson Co., Inc. and Chris Vandemoer (collectively,
Vandemoer), and is encumbered by two conservation easements held by The Nature Conservancy (TNC). The
parties are currently in eminent domain litigation for Phase 1 of the Project and have had productive
conversations regarding a global settlement for all three phases of the Halligan Project. The acquisition will
include:
• a temporary access easement for construction
• a permanent access easement for ongoing maintenance and operations
• a permanent easement for flood/high water events
• fee title to approximately 5.48 acres of land for inundation
To meet near-term project timelines, prompt acquisition of the property rights is necessary. Staff fully
intends to continue negotiating in good faith with the affected property owners and is requesting
authorization to, in consultation with the City Attorney’s Office, use eminent domain as necessary to
acquire the needed property rights. To effectuate a possible global settlement in the City’s eminent
domain litigation with Vandmoer, the City needs Council’s authorization of eminent domain to include
Phase II and Phase III, so that all property rights needed from Vandemoer for the entire project can be
acquired at one time.
This action would ensure the City can secure all access rights required to complete the final two phases of the
Halligan Project over the primary access route to the Halligan Dam and Reservoir:
• Phase 1 - permitting and design (site visits and data collection related to permitting processes and
preliminary design work for the reservoir enlargement and for the diversion structure replacement)
• Phase 2 - construction (construction work related to replacement of dam and diversion structure)
• Phase 3 - long-term maintenance and operations of the dam and reservoir (including permanent
maintenance of measuring devices on the reservoir and diversion structure and environmental
monitoring requirements under governmental permits)
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STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
In the Halligan Project, the City seeks to enlarge the Halligan Reservoir to meet treated water demands of
future Utilities customers and provide added reliability for all Utilities customers, in case of prolonged drought
and uncertainties such as wildfires or infrastructure failures. Halligan Reservoir is located on the North Fork of
the Cache la Poudre River, about 25 miles northwest of Fort Collins. To enlarge the Reservoir, the dam will be
reconstructed.
The City does not currently own all property rights necessary to complete the design, construction, and
operations and maintenance of the Halligan Project. The primary property rights the City needs to acquire for
the life of the project are access rights and inundation rights. However, this authorization request is specific to
Phases 2 and 3 and includes temporary and permanent access easements across a property that
encompasses the primary access route to the dam and reservoir. Council has already authorized eminent
domain for access rights needed from Vandemoer to ensure Phase 1 activities, including data collection and
surveying, can be conducted in a timely manner. The access sought for Phases 2 and 3 would allow for
construction and operations and maintenance.
Staff from Real Estate Services and Utilities, with support from the City Attorney’s Office, has been working
with the landowners in varying capacities during the past six years. The City c urrently has an executed
possession and use agreement for access during design and permitting (Phase 1) over this property. Staff, the
City Attorney’s Office, and outside legal counsel are currently negotiating a settlement with Vandemoer to
resolve and finalize not only Phase 1 access , but also property rights needed for Phases 2 and 3 as well. If a
settlement is not reached, this authorization would allow the City to pursue eminent domain on the property for
Phases 2 and 3.
Recommendation
Staff recommends that City Council authorize the use of eminent domain to provide a process that will allow
the City to meet project deadlines while ensuring fair and equitable treatment of the landowners. The eminent
domain process provides a tool for staff to meet pro ject deadlines while ensuring all property owners are fairly
compensated for the property rights acquired by the City. Condemnation will only be used if necessary and if
the City is unable to reach an agreement with the landowners in a timely manner that would avoid the need for
eminent domain.
In summary, obtaining eminent domain authority for Phase 2 and Phase 3 activities on the primary access route
to the dam/reservoir will:
• Allow staff to develop the schedule for design activities with more certainty.
• Ensure adherence to the planned property acquisition schedule, reducing the risk and cost of
possible future delays related to access.
• Ensure consistent treatment to affected property owners.
• Meet procedural requirements to address a conservation easement over the land for all phases of the
project.
• Allow staff to pursue a global settlement for property rights from Vandemoer for all three phases of the
project.
CITY FINANCIAL IMPACTS
Both staff and the landowners have invested a considerable amo unt of time discussing access needs and
compensation for the Halligan Project. Real estate acquisition costs are anticipated to comprise less than one
percent of the total cost of the Halligan Water Supply Project, which was estimated at a probable cost of
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$120M. This cost is being updated to a 30% design estimate and will be available early Q1 2023. This Council
action will not authorize any new funding for the Halligan Project.
The use of eminent domain provides a process for staff to control real estate acquisition costs and minimize
risks to the project associated with access needs.
PUBLIC OUTREACH
Staff has been actively engaged with the landowners since 2016.
ATTACHMENTS
1. Halligan Area Landownership Map (PDF)
BLM CPW CSU Private Landowner #1 City Private Landowner #2 Private Landowner #3 Private Landowner #4 Private Landowner #5 Private Landowner #6 Private Landowner #7 State Land Board TNC Private Landowner #8 Various Private Landowners 1RUWK)RUNRIWKH&DFKHOD3RXGUH5LYHU13,&ATTACHMENT 1
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ORDINANCE NO. 083, 2022
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE ACQUISITION BY EMINENT DOMAIN PROCEEDINGS OF
CERTAIN PROPERTY RIGHTS NECESSARY FOR PHASE 2 (CONSTRUCTION) AND
PHASE 3 (OPERATIONS AND MAINTENANCE) OF THE HALLIGAN WATER SUPPLY
PROJECT
WHEREAS, by the adoption of Resolution 2003-121, City Council authorized the City
Manager to proceed with investigation, planning, regulatory review processes, site acquisition,
design, and construction of the Halligan Reservoir Enlargement Project, now referred to as the
Halligan Water Supply Project (the “Project”); and
WHEREAS, the City is proceeding with Phase 1 of three phases of the Project, which
will include site visits and data collection related to the permitting and design work for the
reservoir enlargement and replacement or modification of the dam and diversion structures; and
WHEREAS, to accomplish the work of Phase 1, the City needs access to Halligan
Reservoir; and
WHEREAS, City Council authorized the use of eminent domain for property rights
associated with Phase 1 of the Project by adopting Ordinance No. 013, 2020, on January 21,
2020; and
WHEREAS, the City has negotiated with the property owners in good faith for the
acquisition of the property rights addressed by Ordinance No. 013, 2020; and
WHEREAS, the negotiations with particular property owners have led to the possible
settlement of access across certain property for all three phases of the Project; and
WHEREAS, to effectuate that settlement in the pending court case with those property
owners, it is necessary that the City Council’s previous eminent domain authorization be
expanded to include Phase 2 and Phase 3 of the Project, so that all property rights needed from
these owners for the entire Project can be addressed at one time; and
WHEREAS, the additional property rights needed for Phases 2 and 3 are described on
Exhibits “A” through “D”, attached hereto and incorporated herein by this reference (the
“Property Rights”); and
WHEREAS, the City will continue to negotiate in good faith for the acquisition of the
Property Rights from the owners thereof; and
WHEREAS, the acquisition of these additional Property Rights is desirable and necessary
for the construction, long-term maintenance and operation of the Project, is in the City’s best
interest, and enhances public health, safety, and welfare because it is in furtherance of the
Project, which will meet the demands of future Fort Collins Utilities customers and provide
added reliability for all Utilities customers; and
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WHEREAS, the acquisition of the Property Rights may, by law, be accomplished
through eminent domain.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determination and
findings contained in the recitals set forth above.
Section 2. That the City Council hereby finds and determines that it is necessary in
the public interest to acquire the Property Rights described herein for the purpose of the
permitting and design, construction, and operations and maintenance of the Project.
Section 3. That the City Council hereby authorizes the City Attorney and other
appropriate officials of the City to acquire the Property Rights for the City by eminent domain
proceedings.
Section 4. That the City Council hereby authorizes the Interim City Manager, in
consultation with the City Attorney, to provide terms and conditions of any conveyance as she
may determine to be appropriate; and to hereafter amend, adjust, or clarify the Property Rights
and the extent or nature of the interests to be acquired so that the City may acquire all property
interests necessary for the Project; and to delay or forego pursuing eminent domain based upon
the status of negotiations and any litigation.
Section 5. That the City Council further finds that, in the event acquisition by
eminent domain of the Property Rights or any of them is commenced, immediate possession is
necessary for the public health, safety, and welfare.
Introduced, considered favorably on first reading, and ordered published this 5th day of
July, A.D. 2022, and to be presented for final passage on the 19th day of July, A.D. 2022.
Mayor
ATTEST:
City Clerk
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Passed and adopted on final reading this 19th day of July, A.D. 2022.
Mayor
ATTEST:
City Clerk
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