ELLY GRIMM

   • Leader & Times

The Liberal City Commission took a step forward with a land purchase Tuesday evening at its most recent meeting.

“As the commission is aware, discussions have been going on  with Swalar LLC in regards to the potential purchase of 363.52 acres of surface and two accompanying water rights. The water rights are No. 454, dated Oct. 29, 1948, and No. 27, 277 dated Aug. 27, 1976,” Chief Financial Officer Brian Mannel said. “The water acre feet totals 702, with the Division of Water Resources requiring a reduction to 89.1 percent upon converting agricultural use to municipal use for a net of municipal use of 625 acre feet. The sellers have priced the real estate in an amount of $1,050,000 for both surface and water rights. Discussions have included the exploration of purchasing the water rights with the surface potentially being sold to a third party and making installments for the purchase of the water rights. Swalar LLC has indicated they are willing to sell the surface and water separately. While both sales would need to occur, they are not inclined to sell the separated real estate without both surface and water having been placed under contracts for sale. With that in mind, Swalar LLC has recently negotiated a contingent agreement to sell the surface rights to a third party for $1,200/acre or $436,224. This leaves the balance to the City of $613,776 for the purchase of 702 acre feet of water rights. The City of Liberal would assume the duties and costs of contracts and deeds for separating the water from surface rights with the surface rights conveyed to the third-party buyer.”

Mannel then offered some clarification for the public.

“I want the public to be aware, we’re in a good position as far as our current available acre feet of water – we’re at about one-third of our total acre feet we can use,” Mannel said. “That being said, 58 percent of our acre feet are not certified, and they are also the most junior of water rights because they were processed and applied for near the very end of the Groundwater Management District being closed to new water rights. The two water rights included for purchase would be the second and fifth oldest water rights out of the 27 owned by the City of Liberal. The attractiveness of these senior water rights would be in the case of any kind of limitations from the Division of Water Resources under a Local Enhanced Management Area (LEMA), and right now, they’ve proposed a 33 percent reduction to agricultural use water rights in this district. There is a potential in the future of what’s called an Intensive Groundwater Use Control Area (IGUCA), and that is typically based on senior water rights reduction to the most junior water rights taking the biggest reduction versus the senior rights that might not be imperiled at all.”

And the discussions did not end there, Mannel said.

“The water rights would retain an easement on the 363.52 acres of surface. Swalar LLC has offered to the City of Liberal an initial sale closing installment for the water rights of $350,000 with the balance due in July of 2027,” Mannel said. “Swalar LLC has remained open to a combined surface and water rights sale to the City of Liberal but do not desire payment in full beyond July 2027. City staff is recommending the commission review all documents and give a directive on how they wish to move forward with the purchase of the subject water rights in an amount not to exceed $615,000. Phase I and II Environmental Assessments would need to be completed prior to purchase. Sellers are asking for $350,000 at closing with potential funding from the Water Equipment Reserve, which has a current cash balance of $2,310,706. The remaining balance of the water rights purchase is proposed to come from the actual Water Fund in 2027, where proper budget authority could be written in the new year.”

Commissioner Nathan McCaffrey spoke in favor of the agreement.

“I was very pleased to see the memo from PEC on this, it provided a lot of answers to questions I had in terms of the quality of the wells themselves, what we’d be obligating future iterations of the commission to in terms of if they’d want to take advantage of,” McCaffrey said. “There was also some reassurances  about the quality of the water itself since it’s coming from agriculture and will be used for municipal purposes. I was glad to have answers to all of that. I don’t have any objections to this project overall, I’m actually quite pleased with the financing and that side of everything, it’s much more favorable now than when this was originally proposed, which I’m happy to see. I would like to see us move forward with this, but we need to do it within the confines of that aforementioned memo from PEC and the recommendations included in that, especially with the environmental studies and all of that work, because we need to know exactly what we’re getting into.”

“I feel like we’re glossing over how we’re only using 35 percent of the water rights allowed to us now, so this is really a more luxury purchase,” Mayor Jeff Parsons said. “This is something we won’t be needing for many years – if ever, if we’re being completely honest – and I think we need to do 100 percent of the necessary due diligence. I also think it would be a good idea to put out maybe a Request For Proposal for other landowners who have water rights that are close to Liberal to see about any of them. Maybe there’s something closer that we could manage. I think it would be a good idea to explore other options. I think this is a good thing, but we need to be careful and again do all of the necessary due diligence.”

After several more minutes of discussion, the commission ultimately approved an environmental study on the proposed wells before moving forward.

In the meeting’s other new business, the commission also approved Resolution 2461 concerning the city’s notification of the intent to exceed the Revenue Neutral Rate due to the anticipation of the budget including up to 53.392 mills, which is an increase over the 2026 Budget of 51.392 mills. The commission also approved Resolution 2462 concerning a subordination agreement with Western State Bank, Liberal Hospitality LLC Security Bank and the City of Liberal and Change Order No. 3 concerning the allowance of additional work days to Middlecreek Corporation and authorizing $15,900 for fire hydrant extensions in order to complete the project. The commission also approved Ordinance No. 4658 concerning Temporary Event Permit to the Seward County United Way to allow liquor sales and consumption during the group’s Oktoberfest fundraising event set for Saturday, Oct. 10 in Downtown Liberal.