At the October 13, 2014 Sparks City Council meeting staff presented an item to transfer approximately 6,000 acre-feet of water rights from Sparks to Truckee Meadows Water Authority (TMWA’s), which Council approved unanimously.  These were water rights dedicated to Sparks by developers during the time period of 1984 to 1996 in exchange for water service provided by Sierra Pacific.  The water rights were dedicated to Sparks during that time frame for tax purposes; Sparks is a public agency not subject to taxation on the transfer whereas Sierra Pacific was a private corporation and would have been taxed.

Upon quitclaim of the approximately 6,000 acre-feet of rights TMWA began to update ownership and file transfer applications.  In doing so, it was discovered that several rights were missed totaling 48.27 acre-feet.  A Water Rights Deed has been prepared to quitclaim these additional rights from Sparks to TMWA and is attached to this staff report.

Once TMWA was established as a legal entity pursuant to Chapter 277 of NRS, the necessity for Sparks to hold water rights ceased.  By deeding these water rights to TMWA, the State Engineer’s process of filing applications to change the points of diversion, place of use, and manner of use is simplified for the State Engineer and TMWA, and removes any future obligations by Sparks to be involved in the process. This is particularly true as TMWA prepares and manages numerous applications as part of TROA’s implementation.

No monies were expended by Sparks at the time of dedication to acquire these water rights. Sparks took title to the water rights at $0 book basis. The water rights will transfer and be carried on TMWA’s books at a $0 book basis as well. Since these water rights were committed to serve a project(s), they cannot be sold or re-issued by Sparks or TMWA. Even if a project does not use its full commitment in any given year, the unexercised portion of the water right goes into drought storage under TROA.

The transfer of these water rights is not absolutely necessary to accomplish their use.  Reasons to make this transfer are to eliminate Sparks staff time spent on tracking these water rights, reduce TMWA staff time in tracking Sparks rights, and eliminate State Engineer staff time and errors in processing transfer applications, extensions of time or filings of Proof of Beneficial Use. By deeding these water rights TMWA, the State Engineer’s process of filing applications to change the points of diversion, place of use, and manner of use is simplified for the State Engineer and removes any Sparks’ involvement in the process. This is particularly true as TMWA is preparing and managing hundreds of documents to perfect these water rights.

1. City Council may choose to approve the Water Rights Deed as presented.
2. City Council may choose to reject the Water Rights Deed and provide direction to the City Manager.

I move to approve Water Rights Deed (D-1450) to Truckee Meadows Water Authority related to previous City Council action.