Local water dispute noticed nationally

Talk about it

The territorial dispute between Jamestown and Stutsman Rural Water District has drawn national attention by those that follow the field of water law.

“The Jamestown case is relevant because it has moved into the state Legislature,” said Mike Keegan, analyst for the National Rural Water Association in Washington, D.C. “It is also relevant because of the growth. This is more of an issue when there is growth like in North Dakota.”

The city of Jamestown and Stutsman Rural Water are contesting which has the right to provide water service to an area near Jamestown Regional Medical Center including the Titan Machinery project under construction. The debate currently centers on that area although any solution could be used to decide which utility serves other areas of potential expansion.

House Bill 1440 was introduced last week and has not been scheduled for a committee hearing. The bill would create a list of factors that must be considered when determining the compensation for transferring territory from a rural water district to a municipality. The bill specifies that the compensation include the value of the water system’s outstanding debt calculated on a per-user basis, reasonable costs of detaching facilities from the rural water system, fixed operations and maintenance costs on a per-user basis for all users in the transferred territory for 10 years and any debt associated with equipment dedicated to the service of the transferred area.

Rep. Curtiss Kreun, R-Grand Forks, said the bill is still a work in progress.

“When there are disputes there are no ways to settle them,” he said. “We need to remember, it’s all taxpayers’ dollars.”

Kreun said the version of the bill as introduced was seen as not going far enough by the cities and going too far by rural water groups. He said he would meet with both groups to try to craft a bill that would solve disputes before they lead to litigation.

Section 3 of the bill would limit funding to rural water districts involved in disputes with other districts and cities.

“We wanted to indicate funding might not be available if they are in a dispute,” Kreun said. “Let’s not put taxpayer dollars to use for litigations. Let’s see it go to use serving customers.”

Kreun said the state bill is meant to work within federal law. Keegan disagreed.

“It is ambiguous what the appraisal would be,” he said. “It is a good idea, but a state law would not release the protection the federal law places on the service area. It would not be binding.”

The federal law in question is section 1926 (b), which has been in place since the 1960s, he said.

“Basically, the law says you cannot curtail or take over a service area of a rural water that is indebted to the federal government,” Keegan said. “There are two reasons. One, so the rural water can pay back the debt to the federal government. Two, there is a social objective to further the enterprise of getting more people in the country water.”

The conflicts can be solved without going to court, according to Eric Volk, executive director of the North Dakota Rural Water Association.

“It’s never just one meeting and an agreement,” he said. “The rural electrics and commercial utilities went through this same thing and it took them years.”

Keegan agreed.

“You have these issues come up,” he said. “Territorial boundaries between rural waters and cities are common, less common are disputes. Typically they are worked out and it doesn’t go to court. That’s costly. It doesn’t have to go to court.”

The most common solutions include negotiating the territories or sharing the revenue, Keegan said.

Joint meetings between members of the Jamestown City Council and Stutsman Rural Water District Board of Directors in December did include discussions along that line. The two groups were far apart on revenue sharing or royalty amount. The concept was not part of the most recent discussions between the two parties.

Not all water territory disputes are settled with negotiations.

“The Jamestown and Stutsman issue and the North Prairie and Surrey issue are the two big ones now,” Volk said. “Fargo and Cass Rural have worked together great.”

The disagreement between North Prairie Rural Water District and the city of Surrey has escalated to the point court papers were filed in Northwest District Court in Minot on Dec. 6. The case revolves around who will provide water service to a new subdivision of the city of Surrey. No hearings have been scheduled in the case.

Keegan hopes the Jamestown/Stutsman Rural Water dispute is not headed for the courtroom.

“I would encourage the city leaders and Rural Water and all of their attorneys to continue to try to have a greater understanding and keep it out of the state Legislature and the courts,” he said.

Sun reporter Keith Norman can be reached at 701-952-8452 or by email at knorman@jamestownsun.com

Tags: local news, news, water