HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 01/07/2020 - FIRST READING OF ORDINANCE NO. 013, 2020, AUTHORIZAgenda Item 15
Item # 15 Page 1
AGENDA ITEM SUMMARY January 7, 2020
City Council
STAFF
Tawnya Ernst, Real Estate Specialist III
Ryan Malarky, Legal
SUBJECT
First Reading of Ordinance No. 013, 2020, Authorizing the Acquisition by Eminent Domain Proceedings of
Certain Property Rights Necessary for Access in Connection with Phase 1 (Permitting and Design) of the
Halligan Water Supply Project.
EXECUTIVE SUMMARY
The purpose of this item is to seek authorization from City Council to use eminent domain, if necessary and as
a last resort, to acquire access rights for the permitting and design phase (Phase 1) of the Halligan Water
Supply Project (Halligan Project), including access to Halligan Reservoir, the North Poudre Canal Diversion
Structure, and the Calloway Diversion Structure. The acquisitions will include purchase of temporary access
easements from three of the property owners directly impacted by the Halligan Project.
To meet near-term project timelines, prompt acquisition of the access rights is necessary. Staff fully intends to
continue negotiating in good faith with the affected property owners and is requesting authorization to use
eminent domain only if project staff, in consultation with the City Attorney’s Office, believes such action is
necessary after reasonable efforts to negotiate an acquisition.
This action would ensure the City can secure all access rights required to complete the first of three phases of
the Halligan Project:
• 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)
For Phases 2 and 3, there will still be a need for acquisition of temporary construction easements, permanent
access rights, and fee purchase of acreage that will be inundated when the Halligan Reservoir dam rebuild is
complete. Staff has excluded Phases 2 and 3 from this request due to lack of specific details about the extent
of the property rights needed. Staff anticipates returning to City Council to request authorization to use
eminent domain for Phases 2 and 3 later, after construction and long-term access needs are better
understood.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
Agenda Item 15
Item # 15 Page 2
BACKGROUND / DISCUSSION
In the Halligan Water Supply 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. In order to enlarge
the Reservoir, the dam will be reconstructed. Additional infrastructure will also be improved and/or replaced.
The North Poudre Canal Diversion Structure and the Calloway Diversion Structure will both be modified as part
of this project, and are located about 6 and 7.5 miles, respectively, downstream of Halligan dam. The overall
purpose and need for the project, as well as the benefits of enlarging Halligan Reservoir, are described in more
detail in the briefing book provided to City Council on June 6, 2019.
The City does not currently own all property rights necessary to complete the design and construction 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 Phase 1 of the project and
includes temporary access easements across those properties which bound the reservoir and diversion
structures. Access is needed from three landowners to ensure Phase 1 activities, including data collection and
surveying, can be conducted in a timely manner.
Staff from Real Estate Services and Utilities, with support from the City Attorney’s Office, has been working
with local landowners in varying capacities since the early 2000s. Most of these preliminary conversations
involved obtaining informal access agreements for staff and permitting agencies to cross the landowners’
property to collect data needed for the permitting process and/or access City lands or project features.
The land acquisition phase of the Halligan Project began in earnest in late 2018. Since that time, staff has been
involved in detailed communications with six landowners to negotiate access to the reservoir and diversion
structures. Discussions have included access needs for all phases of the project (permitting and design,
construction, and operations and maintenance), but the most time sensitive access need is that for Phase 1 -
permitting and design. Staff is close to having a final executed access easement for the west access to the
dam and reservoir with an entity that represents 16 landowners. However, staff has had varied success with
negotiations on the remaining access needed for Phase 1 activities.
The draft environmental impact statement for the Halligan Project was released by the U.S. Army Corps of
Engineers on November 22, 2019. Given the remaining number of easements needed and the time sensitivity
to begin design activities in 2020, Staff is requesting eminent domain authorization to provide a tool to meet
the project deadlines.
Recommendation
Staff recommends that City Council authorize the use of eminent domain for this project to provide a process
that will allow the City to meet project deadlines while ensuring fair and equitable treatment of landowners.
The eminent domain process provides a tool for staff to meet project 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 a property owner in a timely manner, through
good-faith negotiations.
In summary, obtaining eminent domain authority for Phase 1 activities for the Halligan Project 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.
Agenda Item 15
Item # 15 Page 3
CITY FINANCIAL IMPACTS
Both staff and the landowners have invested a considerable amount 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 is $120M. 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.
BOARD / COMMISSION RECOMMENDATION
Authorization of eminent domain was presented to Water Board on October 3 and October 17. Based on
Water Board feedback, staff continued to work on good faith negotiations with several landowners during the
months of October, November and December 2019. On December 19, 2019 Water Board recommended that
City Council authorize the use of eminent domain for the Halligan Project, as needed to obtain temporary
access easements for Phase 1-permitting and design. (Attachment 2)
PUBLIC OUTREACH
Staff has been actively engaged with landowners surrounding Halligan in various capacities since the 2000s.
In the past year staff sent out a survey to local landowners to understand how they would like to stay informed
about the project progress. actively addressing community questions and working with nearby residents and
landowners.
The following specific actions have been taken with landowners included in this eminent domain authorization
request:
• July 2019: Letter to all Halligan Reservoir neighboring property owners
• August 2019: Letter to all affected landowners regarding potential easement requests
• October 2019: Board and Council notification letter to all affected landowners
• December 2019: Board and Council notification letter to all affected landowners
• Approximately 15 in person meetings with individual landowners to discuss specific access needs and
compensation.
• Numerous telephone calls and email communications between meetings.
Staff will continue public outreach and engagement efforts with stakeholders throughout the duration of
the project.
In addition, staff maintains an active project website available at: <https://www.fcgov.com/halligan/>
ATTACHMENTS
1. Halligan Reservoir Landownership Map (PDF)
2. Water Board minutes, December 19, 2019 (draft) (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
North Fork of the Cache la
Poudre River
NPIC
ATTACHMENT 1
Excerpt from Unapproved DRAFT MINUTES - WATER BOARD
REGULAR MEETING
December 19, 2019, 5:30 p.m.
222 Laporte Avenue, Colorado River Community Room
12/19/2019 – Excerpt from Unapproved DRAFT MINUTES Page 1
Halligan Water Supply Project: Property Rights Acquisition Needs & Eminent Domain
Authorization
(Attachments available upon request)
Senior Real Estate Specialists Tawyna Ernst and Kerri Allison provided an update on staff’s
request for eminent domain authority and landowner negotiations. City Council to hear
eminent domain request for Phase I on January 7. Staff has met with landowners multiple
times; several agreements have been drafted and are nearing final form. Landowners’
Association excluded from eminent domain request for Phase I. Potential exclusion of
another landowner, pending progress before January 7.
Discussion Highlights: Board members commented on and inquired about various related
topics including the reason for the delay (staff: a lot of properties are protected by
conservation easements, being sensitive and working with landowners to limit times of
access and the number of vehicles per day, etc., and temporary access easements for
Phase 1, which will focus on design and permitting, water quality sampling, surveying, etc.
over three years; is a sensitive topic; eminent domain process is a last resort and would be
more costly for the City; due to project deadlines, any further delay of the authorization
request would put the project at risk of missing the next field season and therefore project
milestones; suggestion that a third party assist in negotiations; The Nature Conservancy is
one of the 16 landowners involved and is also the conservation easement owner); project
timeline, deadlines, and milestone dates; appraisals and compensation for property access;
revising the suggested motion to be more specific.
Board Member Bovee moved that Water Board recommend City Council authorizes the
ability to use eminent domain as necessary for those properties that have not come to
agreement with the City to complete Phase I (permitting and design) of the Halligan Water
Supply Project in a reasonable timeframe with reasonable costs.
Board Member Kuiken seconded the motion.
Discussion Highlights: Board members commented on various related topics including
reiterating that we cannot afford to miss a field season; eminent domain is a last
resort/property rights are sacred; appreciate staff’s sensitivity and efforts working with
landowners, and balancing needs of the parties involved.
ATTACHMENT 2
WATER BOARD
REGULAR MEETING
12/19/2019 – Excerpt from Unapproved DRAFT MINUTES Page 2
Vice Chairperson Tarry and other board members made friendly amendments to the
motion.
Board Member Bovee accepted the friendly amendments.
Revised motion
Board Member Bovee moved that Water Board recommend City Council authorizes the
ability to use eminent domain as necessary for those properties that have not come to
agreement with the City to complete Phase I (permitting and design) of the Halligan Water
Supply Project in a reasonable timeframe with reasonable costs.
Vote on the motion: it passed unanimously, 8-0
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ORDINANCE NO. 013, 2020
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE ACQUISITION BY EMINENT DOMAIN PROCEEDINGS OF
CERTAIN PROPERTY RIGHTS NECESSARY FOR ACCESS IN CONNECTION WITH
PHASE I (PERMITTING AND DESIGN) 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 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, the North Poudre Canal Diversion Structure, and the Calloway Diversion Structure;
and
WHEREAS, to meet near-term project timelines, the City will need to acquire certain
property rights as described on Exhibits “A” through “C”, attached hereto and incorporated
herein by this reference (the “Property Rights”); and
WHEREAS, the City will negotiate in good faith for the acquisition of the Property
Rights from the owners thereof; and
WHEREAS, the acquisition of the Property Rights is desirable and necessary for the
permitting and design phase 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
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 of the Project.
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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 further finds that, in the event acquisition of
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 7th day of
January, A.D. 2020, and to be presented for final passage on the 21st day of January, A.D. 2020.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 21st day of January, A.D. 2020.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
EXHIBIT B
EXHIBIT C