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HomeMy WebLinkAbout05/07/2013 13 Cowiche Creek Conservation Easement AcquisitionBUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No.) For Meeting of: 5/7/2013 ITEM TITLE: Resolution authorizing acquisition of conservation easement along a portion of Cowiche Creek for watershed protection, authorizing expenditure of up to $70,000 in water enterprise funds for such acquisition, and authorizing the City Manager to negotiate and execute all documents necessary and appropriate to accomplish such acquisition SUBMITTED BY: Debbie Cook - Director of Utilities & Engineering SUMMARY EXPLANATION: Cowiche Canyon Conservancy ( "CCC ") is seeking to expand and develop the Cowiche Canyon Trail. To this end, it has been engaged in fund raising efforts to acquire title to property along the existing western terminus of the trail to allow for extension of the trail system into the foothills west of Summitview Avenue. It has been proposed that the City of Yakima participate in the project by funding acquisition of a "conservation easement" to preserve and protect the watershed for Cowiche Creek along the southern bank of the creek in the vicinity of the current westerly terminus of the Cowiche Canyon Trail. The conservation easement would lie in property currently outside the city limits. The cost of such participation is $70,000.00. Given the purposes of watershed protection, a sufficient nexus exists between watershed protection along the riparian course of Cowiche Creek and the irrigation and potable water supply of the City of Yakima to justify using funds from the city's enterprise water fund to pay for the conservation easement. Under state law, either the city or a "nonprofit nature conservancy corporation" may purchase or acquire a conservation easement for watershed protection. RCW 64.04.130. A transaction may be structured whereby city funds are contributed to the qualified nonprofit nature conservancy corporation, with the condition that the appropriate conservation easement be established and recorded. Resolution: X Other (Specify): Contract: Start Date: Item Budgeted: No Ordinance: Contract Term: End Date: Amount: $70,000 Funding Source/Fiscal Impact: Strategic Priority: Insurance Required? No Mail to: Phone: APPROVED FOR SUBMITTAL: RECOMMENDATION: Authorize this Resolution. ATTACHMENTS: MM Water Enterprise Fund, $70,000 appropriation Partnership Development City Manager m3mmm F-] Resolution authorizing acquisition of RESOLUTION.Cowiche Canyon. CONSERVATION EASEMENT.Agul 24.2013.docx conservation easement along portion of Cowiche Creek for watershed protection. Memo.COWICHE CREEK.Cover Memo.April 23.2013.doc Cowiche Canyon Cover Memo Memo.COWICHE CREEK.Watershed.April 29.2013.REVISED.doc Watershed Protection - Expenditure of Public Funds RESOLUTION NO. R -2013- A RESOLUTION authorizing acquisition of conservation easement along portion of Cowiche Creek for watershed protection, authorizing expenditure of up to $70,000 in water enterprise funds for such acquisition, and authorizing the City Manager to negotiate and execute all documents necessary and appropriate to accomplish such acquisition. WHEREAS, the City of Yakima (City) pursuant to RCW 35.88.010 is given jurisdiction over all the lakes, rivers, springs, streams, creeks, or tributaries constituting the sources of supply from which the City obtains its supply of water, or for the preservation and protection of the purity of the water supply, and over all property within the areas draining into the lakes, rivers, springs, streams, creeks, or tributaries constituting the sources of supply whether they or any of them are within the City limits or outside; and WHEREAS, Cowiche Creek and the watershed of such creek, form a source of water flowing into the Naches River and Yakima River Basin, thus constituting a potential source of domestic and irrigation water supply for residents of the City, and habitat for fish; and WHEREAS, in December 2012, the Salmon Recovery Funding Board awarded grant funds for the removing irrigation diversions within Cowiche Creek, thus opening approximately twenty -five miles of Cowiche Creek waterway for fish habitat; and WHEREAS, RCW 64.04.130 authorizes any state agency, federal agency, county, city, town, or metropolitan municipal corporation, nonprofit historic preservation corporation, or nonprofit nature conservancy corporation to acquire interests in real property, including but not limited to conservation easements, for conservation, preservation and protection of watersheds and other environmental assets; and WHEREAS, the Cowiche Canyon Conservancy, a qualified nonprofit nature conservancy corporation, has proposed the purchase and acquisition of real property situated at the western terminus of the existing Cowiche Canyon Trail to provide for environmental protection of such property and extension of such trail. The Cowiche Canyon Conservancy has requested the City's participation in such project, which participation would include the City's expenditure of up to $70,000. Such funds would be used by the Cowiche Canyon Conservancy to assist in the acquisition of the property. In consideration of such expenditure, a conservation easement would be placed upon the portion of such property that corresponds to the watershed for Cowiche Creek, for the protection of the City's water supply and the preservation and enhancement of fish habitat within and along the adjoining Cowiche Creek streambed; and WHEREAS, the City maintains and operates an enterprise water fund for the purpose of providing for the operation, maintenance and capital costs of the City's water utility; and 1 WHEREAS, the City Council finds and determines that sufficient funds are available in the enterprise water fund for these purposes, and that approval of such expenditure and acquisition of conservation easement will preserve and protect the Cowiche Creek watershed for fish habitat and for the benefit of the City's future water needs and the Yakima River Basin; and WHEREAS, the City Council finds and determines that the City Manager should be authorized to negotiate with the Cowiche Canyon Conservancy concerning the terms, conditions and designation of the conservation easement, and to execute such conservation easement on behalf of the City, subject to approval of such easement by the City Attorney' and WHEREAS, the City Council finds and determines that the expenditure of City water enterprise funds in the amount up to $70,000.00 to Cowiche Canyon Conservancy in consideration for the conservation easement is in the best interests of residents of the City of Yakima, and will promote the purposes of the water utility and the general health, safety and welfare; therefore BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: Section 1. The City Manager is hereby authorized to negotiate the terms, conditions and designation of a conservation easement to be placed upon property to be acquired by Cowiche Canyon Conservancy to preserve and protect the watershed of Cowiche Creek within such acquired property. Section 2. Upon negotiation of an appropriate conservation easement pursuant to Section 1 above, the City Manager is authorized to execute any and all documents necessary and appropriate to create and implement such conservation easement, subject to prior review and approval of the City Attorney. Section 3. In consideration of the creation of such conservation easement, the City Manager is authorized to expend or pursue proper appropriation of up to $70,000.00 from the City of Yakima water enterprise fund, such funds to be placed in escrow payable to Cowiche Canyon Conservancy pending closing of the real estate purchase and sale of the subject property and recording of such easement. ADOPTED BY THE CITY COUNCIL this day of May, 2013. ATTEST: 2 Micah Cawley, Mayor City Clerk CITY OF YAKIMA LEGAL DEPARTMENT 200 South Third Street Yakima, Washuigton %Rn (509)575bQ30 F" (,"P75 61W MEMORANDUM April 29, 2013 TO: Tony O'Rourke, City Manager Jeff Cutter, City Attorney FROM: Mark Kunkler, Senior Assistant City Attorney SUBJECT: Watershed Protection — Expenditure of Public Funds Cowiche Canyon Conservancy ( "CCC ") is seeking to expand and develop the Cowiche Canyon Trail. To this end, it has been engaged in fund raising efforts to acquire title to property along the existing western terminus of the trail to allow for extension of the trail system into the foothills west of Summitview Avenue. It has been proposed that the City of Yakima participate in the project by funding acquisition of a "conservation easement" to preserve and protect the watershed for Cowiche Creek along the southern bank of the creek in the vicinity of the current westerly terminus of the Cowiche Canyon Trail. The conservation easement would lie in property currently outside the city limits. The cost of such participation is $70,000.00. The issues are: (a) whether such expenditure is a proper expenditure of city funds; and (b) if expenditure of city funds is appropriate, what funding sources are available? Based on the attached memorandum and on previous research, it is my conclusion that expenditure of city funds for watershed protection is lawful and permitted. It is also my conclusion that, given the purposes of watershed protection, a sufficient nexus exists between watershed protection along the riparian course of Cowiche Creek and the irrigation and potable water supply of the City of Yakima, together with water storage plans of the city for the enhancement of such supply for the city and the Yakima River Basin. Consequently, funds from the city's enterprise water fund are available to pay for the conservation easement. Under state law, either the city or a "nonprofit nature conservancy corporation" may purchase or acquire a conservation easement for watershed protection. RCW 64.04.130. A transaction may be structured whereby city funds are contributed to the qualified nonprofit nature conservancy corporation, with the condition that the appropriate conservation easement be established and recorded. CITY OF YAKIMA LEGAL DEPARTMENT 200 South Third Street Yakima, Washuigton %Rn MEMORANDUM April 29, 2013 TO: Honorable Mayor and City Council Tony O'Rourke, City Manager FROM: Mark Kunkler, Senior Assistant City Attorney (509) 575 -RM Fax (509) 575 -6160 SUBJECT: Watershed Protection — Expenditure of Public Funds Issue Presented: The Cowiche Canyon Conservancy ( "CCC ") has presented plans to extend the Cowiche Canyon Trail. In order to connect the existing Trail terminus (at the western end of Cowiche Canyon), the CCC has entered into a Real Estate Purchase and Sale Agreement for parcels of property lying along the south slope of Cowiche Canyon and extending to Summitview Avenue. Acquisition of these properties will allow extension of the Trail from the terminus of Cowiche Canyon to a point allowing connection to the trail network lying west of Summitview Avenue. The total purchase price for the parcels is $283,000.00. The CCC is pursuing various funding mechanisms, including solicitation of donations and grant applications. CCC has requested that the City of Yakima consider funding $70,000 toward the project. The $70,000 is proposed as consideration for a conservation easement lying along that portion of the property constituting the south slope of Cowiche Canyon. The question is whether such expenditure is lawful under the City's Charter and state law, and, if so, what is the appropriate City fund? Summary Answer: While the City's Charter prohibits expenditure of City funds for the "purchase" of property lying outside the City limits for "parks purposes" (Charter Article Section 1), such provision does not limit expenditures for real property, or interests in real property, lying outside the City limits for other purposes, so long as those acquisitions constitute and further a legitimate public purpose. Pursuant to RCW 35.88.010, cities are given jurisdiction over: ... all the lakes, rivers, springs, streams, creeks, or tributaries constituting the sources of supply from which the cities and towns or the companies or individuals furnishing water to the inhabitants thereof obtain their supply of water, or store or conduct it, and Memorandum to Honorable Mayor and Members of the City Council April 29, 2013 Page 2 over all property acquired for any of the foregoing works or purposes or for the preservation and protection of the purity of the water supply, and over all property within the areas draining into the lakes, rivers, springs, streams, creeks, or tributaries constituting the sources of supply whether they or any of them are within the city or town limits or outside. Thus, watershed protection is a legitimate public purpose, provided a sufficient "nexus" exists between "areas draining into the lakes, rivers, springs, streams, creeks, or tributaries" and a "source of supply" of water for the city. One of the stated functions of preserving an adequate source of water is the ability to "store" water. Under the terms of the "Yakima River Basin Integrated Water Resource Management Plan Final Programmatic Environmental Impact Statement ( "FPEIS ") issued March 2, 2012, the City of Yakima has proposed to participate in a "groundwater storage" element. The groundwater storage element is one of the elements of the Preferred Alternative under the FPEIS, and involves a system whereby surface water is "injected" into the groundwater aquifer and then withdrawn by pumps to meet water needs in the season prior to release of surface water storage (reservoirs). The point of diversion for waters to be used in the storage program lies in the Naches River north of the confluence of Cowiche Creek. The water would be treated and transported through the pumps and pipes of the City's water system and injected into an aquifer at City pump sites located south of the Cowiche Creek confluence with the Naches River. With the diversion of Naches River waters into the City's pipes and pumps, followed by injection into a groundwater aquifer for storage purposes, the waters of Cowiche Creek will be important to maintain sufficiency and quality of water for fish flows in the Lower Naches River Basin and the Yakima River Basin. The use of groundwater storage, with maintenance of outflows from Cowiche Creek, would also enhance the continued viability of groundwater aquifers throughout the Yakima River Basin. Thus, a connection exists between the watershed of Cowiche Creek and the groundwater storage and groundwater aquifers that serve the City of Yakima. It is my opinion that a sufficient nexus exists between acquisition of a conservation easement for watershed protection and preservation and enhancement of the irrigation and potable water supplies of the City of Yakima. The appropriate City funds to acquire the conservation easement could include the general fund, enterprise water fund and /or enterprise irrigation fund. Determination of which fund should be used is a function of management, giving consideration to available fund balances, maintaining necessary and appropriate fund balances for reserves and capital improvements, and managing rates and fees for the water /irrigation utility rate - payers. Memorandum to Honorable Mayor and Members of the City Council April 29, 2013 Page 3 A. Discussion. 1. Purpose of Proposed Acquisition. The CCC exists to preserve, promote, protect and develop the Cowiche Canyon Trail and to extend the network of recreational trails from the existing terminus at the western end of the Cowiche Canyon westward. CCC's interests, however, are not limited solely to development and maintenance of a recreational trail, but also include preservation of the ecology of the Cowiche Canyon, fish habitat and water quality. CCC has partnered with the City of Yakima in a habitat restoration project, funded through grants from the Washington State Department of Transportation (WSDOT) and the Washington State Recreation and Conservation Office (RCO).1 The Charter of the City of Yakima provides in Article I Section 1: The people of the City of Yakima, within the boundaries as now established, or as hereafter established, shall continue to be the body politic and corporate by name of City of Yakima, and under that name shall have perpetual succession; shall use a corporate seal; may sue and be sued; may acquire property within or without its boundaries for municipal purposes by purchase, gift, devise, lease, or condemnation, and may sell, lease, hold, manage and control such property as its interests may require, except that property purchased for park purposes shall be within the city limits; and except as prohibited by the constitution of the State of Washington, or restricted by this charter, the City of Yakima shall have all municipal powers, functions, rights, privileges and immunities of every name and nature whatsoever pertaining to cities of the first class within the State of Washington. (Emphasis added). Thus the City is barred from "purchasing" property outside the City limits for "park purposes. ,2 Court decisions in the State of Washington have found development of a system of recreational trails to be for "park ' See Presentation to RCO entitled "Acquisition, Habitat Restoration, and Trail Development Along Cowiche Creek, Yakima County," presented by Doug Mayo, Yakima City Engineer, and Margaret Neuman, Executive Director, Mid - Columbia Fisheries Enhancement Group. 2 The language would not prevent the acquisition of property outside the City limits for park purposes if the property is acquired through gift or devise. Memorandum to Honorable Mayor and Members of the City Council April 29, 2013 Page 4 purposes." In re Petition of City of Long Beach, 119 Wash.App. 628, 82 P.3d 259, review denied, 152 Wash.2d 1015 (2004). While the City may not purchase property outside its limits for park purposes, it may acquire property outside its limits for watershed protection. RCW 35.88.010 provides: For the purpose of protecting the water furnished to the inhabitants of cities and towns from pollution, cities and towns are given jurisdiction over all property occupied by the works, reservoirs, systems, springs, branches and pipes, by means of which, and of all the lakes, rivers, springs, streams, creeks, or tributaries constituting the sources of supply from which the cities and towns or the companies or individuals furnishing water to the inhabitants thereof obtain their supply of water, or store or conduct it, and over all property acquired for any of the foregoing works or purposes or for the preservation and protection of the purity of the water supply, and over all property within the areas draining into the lakes, rivers, springs, streams, creeks, or tributaries constituting the sources of supply whether they or any of them are within the city or town limits or outside. (Emphasis added). Such authority is not limited by the City Charter, which further provides that "the City of Yakima shall have all municipal powers, functions, rights, privileges and immunities of every name and nature whatsoever pertaining to cities of the first class within the State of Washington." Charter, Article I Section 1. Acquisition of a conservation easement for watershed protection would not prevent another entity or agency from constructing and maintaining a recreational trail over the protected land, so long as such construction, use and maintenance did not subvert the primary purpose of watershed protection. 2. Yakima River Basin Integrated Water Resource Management Plan. The Yakima River Basin Integrated Water Resource Management Plan ( "Integrated Plan ") represents a comprehensive study and plan for water supply and fish enhancement for the entire Yakima River basin. In the cover letter from the U.S. Department of the Interior, Bureau of Reclamation, to the FPEIS issued March 2, 2012, it is stated: Memorandum to Honorable Mayor and Members of the City Council April 29, 2013 Page 5 Reclamation and Ecology, working with the Yakima River Basin Water Enhancement Project (YRBWEP) Workgroup (composed of representatives of the Yakama Nation, Federal, State, county, and city governments, environmental organizations, and irrigation districts), developed the proposed Integrated Plan as a comprehensive approach to address a variety of water resource and ecosystem problems affecting fish passages and habitat and agricultural, municipal, and domestic water supplies in the Yakima River basin. The Integrated Plan contains seven elements: reservoir fish passage, structural and operational changes to existing facilities, surface water storage, groundwater storage, habitat/watershed protection and enhancement, enhanced water conservation, and market reallocation. The environmental impacts of the Integrated Plan are evaluated at a programmatic level in this document. Section 2.4.6 and following sections of the FPEIS addresses the proposed groundwater storage elements as follows: 2.4.6 Groundwater Storage Element The Groundwater Storage Element of the Integrated Plan would use surface water to recharge (replenish) underground rock formations that store groundwater (aquifers) and use the natural storage capacity of those aquifers to store water for later recovery and use. Typically aquifers would be recharged with surface water during high flow periods. The stored water would be used to supply out -of- stream uses, increase stream flows through increased groundwater discharge, and /or replenish depleted groundwater storage. The source water is expected to be the Yakima River or one of its tributaries. Water right permits would be required to divert, store, and use water in a reservoir, including an underground geologic formation (Revised Code of Washington (RCW) 90.03.370). New or existing infrastructure (canals or pipelines) would be used to convey water to the recharge site. The availability of water would be a function of seasonal timing and location within the Yakima River basin. Two proposed groundwater storage actions — shallow aquifer recharge and aquifer storage and recovery (ASR) — would use surface water to recharge aquifers and store water for later withdrawal and use.... Both of these actions are new concepts in the Yakima River basin and would initially be implemented as pilot studies to determine their feasibility. The water yield from a fully implemented ASR program is estimated to be 5,000 to 10,000 acre -feet per year. Memorandum to Honorable Mayor and Members of the City Council April 29, 2013 Page 6 2.4.6.2 Aquifer Storage and Recovery The second groundwater storage action involves a municipal ASR system. The City of Yakima proposes to divert approximately 5,000 to 10,000 acre -feet of water from the Naches River during the winter months and treat it at the City's existing water treatment plant. It would then be injected through wells and later pumped out for use by the City's residents and businesses during summer months when the demand for water is highest. The City has proposed this project and the Integrated Plan would provide funding for implementation. ASR could also be available for other cities in the Yakima basin in the future. These projects would require a water treatment facility, one or more wells that could hold treated water, and a pump station for retrieving stored water. Cowiche Creek is a tributary of the Naches River. Even if the diversion of water from the Naches River for the ASR system is located upstream of the confluence, the water flows from Cowiche Creek would remain necessary to maintain surface water flows in the Naches River and Yakima River basin. Surface water quality of Cowiche Creek is a factor supporting additional need for environmental controls. Under the federal Clean Water Act, Section 303(d) requires the State of Washington to develop a list of water bodies that do not meet quality standards. The Department of Ecology determines the sources of any pollutants and sets the maximum amount of pollutants that each source can discharge to a water body (called "Total Maximum Daily Loads ( "TMDLs ")). The Integrated Plan discussed the water quality of Naches River tributaries as follows.. Several streams in the Naches River basin are included on the 303(d) list for high temperatures.... For most of these streams, Ecology (2005c) identified forest practices, agriculture, riparian modification, and grazing as contributing nonpoint sources to high temperature. In addition, industrial point sources were identified as contributors for four Cowiche Creek basin 303(d) temperature listings. Cowiche Creek has also been included on the 303(d) list for five other parameters.... These water quality concerns affect fish habitat. Cowiche Creek has been listed as spawning and rearing grounds for spring Chinook salmon and steelhead. "Some coho [salmon] spawning and rearing is known to occur in Ahtanum, Cowiche, Buckskin Slough, Taneum, Reecer, and Big Creeks in the Yakima s Dissolved oxygen, fecal coliform, PCB, pH, temperature, industrial point source pollution. Memorandum to Honorable Mayor and Members of the City Council April 29, 2013 Page 7 River basin." Integrated Plan, Section 3.7.1.1, page 3 -39. Upstream extent of anadromous salmonid passage within Cowiche Creek is listed as "entire mainstream" in Table 3 -14. Integrated Plan, id. at 3 -40. In December 2012, the Salmon Recovery Funding Board awarded grant funds in the amount of $575,000 (with matching federal funds pushing the total to over $900,000) to the North Yakima Conservation District. The purpose of the grant funding is to remove small irrigation diversions within Cowiche Creek and thus open an estimated 25 miles of waterway for fish habitat. The project is expected to provide additional flows to support migratory fish species such as steelhead, coho and Chinook salmon. Watershed protection along the course of Cowiche Creek will promote these purposes. In an article discussing this project, the National Oceanic and Atmospheric Administration (NOAA) wrote: Cowiche Creek flows from the pine and fir forests of the east Cascades, through WDFW's Oak Creek Wildlife Area, private ranches and apple orchards, to the sagebrush and basalt cliffs of Cowiche Canyon, a popular recreation area right on the edge of urban Yakima. Salmon and steelhead were blocked from the watershed when irrigation dams were built in the late 1800s. Since the 1990s, the watershed has been a focal area for restoration efforts. Project sponsors have worked with landowners to remove 4 major fish passage barriers (restoring access to over 20 miles of habitat), screen 2 gravity diversions and 18 pumps, and restore riparian areas and instream habitats. A local land trust, the Cowiche Canyon Conservancy, has protected over 2,000 acres for restoration and recreational use. Much of the funding has come from Bonneville Power Administration's Fish and Wildlife Program and the Pacific Coast Salmon Recovery Fund (via Washington's Salmon Recovery Funding Board programs). Today, steelhead and coho are once again spawning in Cowiche Creek and naturally produced juvenile Chinook have been documented moving upstream of diversions that previously blocked their passage. This work represents a major step forward for salmon recovery efforts in the Yakima Basin. Restoration and protection work continue, with the aim of implementing key actions identified in the Yakima Steelhead Recovery Plan, which is incorporated into NOAA's new Middle Columbia River Steelhead Recovery Plan. Right now, the North Yakima Conservation District, the Bureau of Reclamation, and the Yakima - Tieton Irrigation District are finalizing an agreement with irrigators along Cowiche Creek to supply them with piped water from the Tieton River, so that as much as 8 cubic feet of water can remain in Cowiche Creek. Memorandum to Honorable Mayor and Members of the City Council April 29, 2013 Page 8 This significant increase in summer flows will lower stream temperatures and increase habitat capacity while the new irrigation system will keep valuable agricultural land in production. It is a great example of the kind of win -win solution that is needed to make salmon recovery happen in rural communities. The Mid - Columbia Fisheries Enhancement Group has taken the lead on a series of restoration projects in the lower part of the Creek, and the City of Yakima is in the midst of moving one of its municipal irrigation diversions out of the floodplain so that the confluence of Cowiche Creek and the Naches River can be restored in a manner that also reduces flood risks to surrounding areas. In 2009, the Yakama Nation Fisheries coho program started using a mobile acclimatization facility to introduce up to 10,000 coho smolts a year to the Cowiche watershed. This is a major step towards the goal of re- establish a locally- adapted, self- sustaining coho population in the creek. The work in Cowiche Creek has been highly visible to the public. School groups are using the creek as an outdoor lab, and hikers are pausing on the bridges of a rails -to- trails project in the hope of seeing salmon working their way upstream. The Cowiche Creek watershed is an excellent example of how over time, coordinated efforts by diverse partners can lead to salmon recovery at a watershed - scale. Today local partners in the Yakima Basin are working with state and federal salmon recovery programs to repeat this success story in numerous other tributaries in the Yakima Basin. "Columbia Basin Fish Recovery," Salmon Recovery.Gov, U.S. Department of Commerce, National Oceanic and Atmospheric Administration, No. 012 1009, wr. noa lic tios /r cov ry planing/salmon. The diversion of surface waters from the Tieton River will provide additional stream flows for Cowiche Creek. The waters from Cowiche Creek in turn will help maintain fish flows in the Yakima River Basin, off - setting to some extent the diversion of water from the Naches River for the City's proposed aquifer storage reservoir. C. Conservation Easements. Conservation easements are recognized tools to achieve protection of critical areas and to preserve environmental integrity. The conveyance of a conservation easement typically restricts development on property that would lead to degradation of the interest to be protected. The purposes of conservation easements have been described as follows.. Memorandum to Honorable Mayor and Members of the City Council April 29, 2013 Page 9 Conservation easements can serve a variety of purposes, from the protection of forests, wetlands, endangered species habitat, and beaches to the preservation of scenic and historic areas and buildings. Such "conservation purposes" generally fall into one of four categories: (1) conservation for production of economically valuable commodities, such as food and timber (on conservation on "working landscapes "); (2) conservation for human use, such as recreation; (3) conservation of high -value natural areas that represent a unique example of natural beauty or ecological function; or (4) conservation of whole ecosystems, watersheds, or habitat systems.... Duncan M. Greene, "DYNAMIC CONSERVATION EASEMENTS: FACING THE PROBLEM OF PERPETUITY IN LAND CONSERVATION," Seattle University Law Review, Volume 28:467, pages 889 -90 (2005). State statute also specifically authorizes the use of conservation easements. RCW 64.04.130 provides: RCW 64.04.130 Interests in land for purposes of conservation, protection, preservation, etc. — Ownership by certain entities — Conveyances. A development right, easement, covenant, restriction, or other right, or any interest less than the fee simple, to protect, preserve, maintain, improve, restore, limit the future use of, or conserve for open space purposes, any land or improvement on the land, whether the right or interest be appurtenant or in gross, may be held or acquired by any state agency, federal agency, county, city, town, or metropolitan municipal corporation, nonprofit historic preservation corporation, or nonprofit nature conservancy corporation. Any such right or interest shall constitute and be classified as real property. All instruments for the conveyance thereof shall be substantially in the form required by law for the conveyance of any land or other real property. As used in this section, "nonprofit nature conservancy corporation" means an organization which qualifies as being tax exempt under 26 U.S.C. section 501(c)(3) (of the United States Internal Revenue Code of 1954, as amended) as it existed on June 25, 1976, and which has as one of its principal purposes the conducting or facilitating of scientific research; the conserving of natural resources, including but not limited to biological resources, for the general public; or the conserving of natural areas including but not limited to wildlife or plant habitat. As used in this section, "nonprofit historic preservation corporation" means an organization which qualifies as being tax exempt under 26 U.S.C. section 501(c)(3) of the United States Internal Revenue Code of 1954, as amended, and which has as one of its principal purposes the conducting or facilitating of historic preservation activities within the state, including conservation or preservation of historic sites, districts, buildings, and artifacts. Memorandum to Honorable Mayor and Members of the City Council April 29, 2013 Page 10 The Interagency Committee for Outdoor Recreation (IAC), the predecessor to the Washington State Recreation and Conservation Office (RCO), has developed and published a manual stating "Guidelines for Use of Conservation Easements," stating that use of such easements are encouraged in the "Riparian Habitat Grant Program." This manual provides much good guidance regarding terms and provisions to be considered and included in any such instrument. For example, under the "purpose" provisions of the easement, the following language is recommended: The Riparian Habitat Conservation Zone provides riparian habitat and other natural values (collectively, the "Conservation Values "), as more particularly described in Recitals _ and _ below. For purposes of this Easement, riparian habitat is the land area adjacent to aquatic systems with flowing water that contains elements of both aquatic and terrestrial ecosystems which mutually influence each other and provide habitat for fish and wildlife species (Riparian Habitat). Riparian Habitat provides vital functions to aquatic and upland ecosystems which include: soil and streambank stability, stream temperature control, water purification, water storage and conservation, and supply of food and nutrients to the aquatic system. Riparian Habitat includes rivers, streams, wetlands, lakes, and estuaries or near -shore marine habitat. Manual, id. at 10. The Conservation Easement also describes prohibited and permitted uses — which permitted use may include construction of recreational trails and use, so long as the conservation purposes are preserved. D. Funding Options. Possible funding sources for acquisition of a conservation easement include: (a) grant funds; (b) City general fund; and /or (c) City water and /or irrigation enterprise funds. Grant funding may be considered for acquisition of property for recreational trail purposes, and /or for watershed and riparian habitat preservation. The City Charter provision providing that any property purchased for park purposes shall lie within the city limits can be construed to be a prohibition on use of city funds to accomplish the purchase. Grant funds, or funds provided to the city from another source, should not run afoul of the prohibition. Recreational trail development is within the funding parameters of the RCO — and in fact, such grant funds have previously been used to acquire property for park purposes lying outside the city limits.4 4 The City of Yakima has received grant funds for the acquisition of several parcels along the bank of Cowiche Creek (within the urban growth area, but not within city limits), and two 40 -acre parcels lying west of Summitview Avenue. These two parcels were not within the UGA or the city limits. Memorandum to Honorable Mayor and Members of the City Council April 29, 2013 Page 11 City enterprise funds may be used if a sufficient "nexus" exists between the purpose of the fund and the proposed expenditure. As discussed above, it is my opinion that both current needs for protection of water quality and quantity within Cowiche Creek, preservation and promotion of water to enhance water habitat for fish, and the proposed need to assure appropriate surface water flows in conjunction with the groundwater storage program presented in the Integrated Plan, provide a sufficient nexus for both the water and irrigation enterprise funds. The City's participation in the Integrated Plan, together with its proposal to implement a groundwater storage system to help meet domestic and irrigation water needs of the City to offset water draws during peak season, establishes the legitimacy of expenditure . 5 Of course, it also follows that the preservation of watershed, drainage areas and aquifers supplying water, being legitimate public purposes pursuant to RCW 35.88.010, expenditure of general funds to promote such purposes would be appropriate. s The use of enterprise funds, of course, involves several considerations beyond the direct scope of this paper. For example, enterprise funds are "closed funds" dedicated to the efficient operation, maintenance and capital improvement needs of the utility they serve. Rates charged to customers reflect these cost components, and reserves in such funds are used to defray or structure utility rates, and to maintain applicable bond covenants. If reserve funds are drawn from the enterprise fund — even for a permitted purpose — this may affect the fund balances available to accomplish planned capital improvements, operation and maintenance of the utility. If substantially affected, rates may need to be increased to account for the depletion of the fund caused by expenditure.