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KITTITAS COUNTY <br />DEPARTMENT OF PUBLIC WORKS <br />PUBLIC WORKS — BOARD OF COUNTY COMMISSIONERS <br />STUDY SESSION STAFF REPORT <br />STUDY SESSION DATE: June 12, 2023 <br />TOPIC: Annual Water Leases <br />ACTION REQUESTED: Direction to Staff <br />LEAD STAFF: <br />Arden Thomas <br />RECOMMENDATION: <br />Direct Staff to utilize the lowest rate charged throughout the Kittitas Reclamation District <br />to set annual water lease rates. <br />BRIEFING SUMMARY: <br />• Kittitas County has two long term water leases associated with water right <br />purchases. <br />• The water leases specify that Kittitas County will use the annual Kittitas <br />Reclamation Assessment (KRD) to set the annual water lease rate. <br />• There are a range of KRD assessment rates used throughout the district. <br />• It has been Public Works business practice to utilize the property specific KRD <br />assessment to set the annual lease rate. If KRD assesses more than one rate for a <br />property, we use the lowest rate. <br />• One lessee has requested that we utilize the lowest KRD assessed rate throughout <br />the district to set our annual lease rate. <br />• Using the current approach, Public Works will collect $9,811.90 through the <br />leases in 2023. If we revise the lease calculation, we will collect $7,271.37, a <br />reduction of $2,540.53. <br />BACKGROUND: <br />Two Kittitas County water right acquisitions included water "lease -back" arrangements. <br />Kittitas County acquired the water rights and are leasing the water back to the seller for a <br />defined period. One lease will expire in 2027 and the other lease will expire in 2038. <br />Both lease agreements specify that Kittitas County will use the annual Kittitas <br />Reclamation Assessment to set the annual water lease rate. KRD does not have one <br />assessment district -wide, rather KRD assessed rates vary based on soil quality on the <br />assessed property and location on the district. It has been Public Works business practice <br />to utilize the property specific KRD assessment to set the annual lease rate. In instances <br />where there is more than one rate for a property, we use the lowest rate. One lessee has <br />requested that we utilize the lowest KRD assessed rate throughout the district to set our <br />annual lease rate. <br />Page 1 of 3 <br />PUBLIC WORKS BOARD OF COUNTY COMMISSIONERS WORK SESSION STAFF REPORT <br />