Leaves change colors over Big Cottonwood Canyon creek in Salt Lake on Monday, Oct. 9, 2017. 
Adam Fondren, Deseret New

SALT LAKE CITY — The state Water Development Commission voted Tuesday to do a deep dive on surplus water contracts and municipal control of land use outside city boundaries, signaling state law may need to change.

The vote came after a lengthy discussion aimed primarily at Salt Lake City and its ownership of water rights in the Wasatch Canyons watershed.

Salt Lake City owns water up Little Cottonwood Canyon, as an example, and sells that water to the town of Alta via a surplus water contract. That contract can be revoked at anytime and limits connections to geographic boundaries defined more than 40 years ago.

"I have no interest in development," said John Bennett, who studied the issue while a state employee with the Quality Growth Commission. "We are setting a really bad precedent when we say one city ought to be able to control another."

State Engineer Kent Jones, who heads up the state's Water Rights Division, said municipal surplus water contracts occur throughout Utah, but they are especially concerning when they are tied to developments like communities and ski resorts.

"It is troubling to me. It is really going to put us in a bad situation," he said, noting that a canceled contract means his office would be issuing cease-and-desist orders on water being unlawfully used.

"If they are going to permanent uses, they need to be permanently committed."

The state's constitution forbids cities from selling or leasing their water rights, but it does allow for surplus water contracts with the provision they be revocable should that city one day need the water for its own use.

"While the water contract is theoretically subject to termination, with all the development, that is not likely to happen," said Steve Clyde, an attorney and a newly appointed commission member who has represented Salt Lake City on water-related issues.

But Clyde, when pressed, wouldn't say it couldn't happen.

The commission also tackled the related issue of extraterritorial jurisdiction, which is granted to first-class cities via a state law adopted to protect the quality of water supplies. Those cities with a population of 100,000 or more can control land use in its watershed from ridgeline to ridgeline.

"If (Salt Lake City) did not have its extraterritorial jurisdiction, we may see a whole different situation in the canyon," Clyde said, warning of development that could mimic Park City.

Sterling Brown, the Utah Farm Bureau's vice president of public policy, questioned the vague language on what constitutes a watershed.

"Where does the watershed stop...That strikes me as a very vague wishy-washy watershed boundary," Brown said.

Clyde said the watershed protections exercised by Salt Lake City extend only to the Wasatch Front canyons in Salt Lake Valley, but Bennett argued that watershed must extend into Wasatch County since the city's public utilities division ponied up $1.5 million to keep Bonanza Flats as open space.

With 90 percent of the city's water supply coming out of those canyons, Clyde added that the extraterritorial jurisdiction tool has worked to protect the vital resource.

"They have effectively put constraint on developments in the canyons," he said.

But critics accused Salt Lake City of using the watershed to devalue property and interfere with the rights of landowners, pointing to lots in subdivisions where some have water and others do not — regardless of availability.

"I don't believe the state granted this authority to Salt Lake City to pre-empt county planning and zoning efforts but from what I've seen, this is exactly what this authority has evolved into," said Norm Henderson, a property owner in Big Cottonwood Canyon,

Rep. Mike Noel, R-Kanab, and the lawmaker who brought the issue before the commission, said the law came about when there wasn't environmental safeguards like the Clean Water Act and other pollution controls.

"We're a completely different society than we were 150 years ago. There has to be reasonable, rational ways to protect the watershed in this modern age," Noel said.

Rep. Joel Briscoe, D-Salt Lake, voted against delving into the issue and complained Salt Lake City was given no notice of the meeting and time to prepare.

"I felt it was the only fair vote."