HomeMy WebLinkAbout26- Ordinances 2026-12 - TO CREATE A NEW DIVISION OF CHAPTER 40 – UTILITIES OF THE BOZEMAN MUNICIPAL CODE TO RELATED TO WATER ADEQUACY
ORDINANCE 2026-12
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA TO CREATE
A NEW DIVISION OF CHAPTER 40 – UTILITIES OF THE BOZEMAN MUNICIPAL CODE TO RELATED
TO WATER ADEQUACY
WHEREAS, pursuant to Mont. Code Ann. § 7-13-4301 (2025), any city may “establish, build,
construct, reconstruct, or extend: … a water supply or distribution system … and operate and
maintain the facilities for public use.”; and
WHEREAS, the governing body of a municipality operating a municipal water system “shall fix
and establish, by ordinance or resolution, and collect rates, rentals, and charges for the
services, facilities, and benefits directly or indirectly afforded by the system, taking into account
services provided and benefits received,” and “the water and sewer rates, charges, and rentals
shall be as nearly as possible equitable in proportion to the services and benefits rendered”
pursuant to Mont. Code Ann. § 7-13-4304 (2025); and
WHEREAS, pursuant to Mont. Code Ann. § 7-13-4402 (2025), the City of Bozeman “has power
to adopt, enter into, and carry out means for securing a supply of water for the use” of the city
or its citizens; and
WHEREAS, a city may acquire private water supply systems or valuable water rights to supply
the city with water, pursuant to Mont. Code Ann. § 7-13-4403 (2025); and
WHEREAS, for the purposes of providing the City of Bozeman with an adequate water supply
for municipal and domestic purposes, the City “shall procure appropriate water rights and the
necessary real and personal property to make an adequate water supply available. The water
rights and property may be acquired by purchase, appropriation, location, condemnation
pursuant to Title 70, chapter 30, or in any other legal manner,” pursuant to Mont. Code Ann. §
7-13-4405 (2025); and
WHEREAS, these standards are currently codified in Chapter 38 of the Bozeman Municipal
Code. However, the City has determined that operational efficiency and user experience will be
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benefited by relocating these existing standards to Chapter 40 of the Bozeman Municipal Code
to locate them with other elements of the municipal code governing the City’s water system;
and
WHEREAS, the City Commission at its public hearing on September 15, 2026, considered all
relevant materials submitted by the staff and the public, along with the proposed draft text of
this Ordinance;
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF
BOZEMAN, MONTANA:
Section 1
That a new Article 2. Division 5. – Water Adequacy shall be added to Chapter 40 of the
Bozeman Municipal Code as follows:
Sec. 40.02.1500
A. Subject to subsection B and subsection C, prior to final approval by the review authority of
development occurring under chapter 38 or chapter 10, the applicant must offset the entire
estimated increase in annual municipal water demand attributable to the development
pursuant to subsection D.
B. Compliance with this section is triggered if the estimated increase in annual municipal
water demand attributable to the development exceeds 0.25 acre-feet after accounting for
the following items as they relate to the development:
1. Current average annual municipal metered water demand;
2. Water demand offsets from a prior payment of cash-in-lieu of water rights;
3. Water demand offsets from a prior transfer of water rights into city ownership,
and;
4. Water demand offsets from an existing water adequacy agreement or similarly
purposed document.
C. Compliance with this section is deferred for any of the following developments until the
occurrence of future development if the applicant records a notice of restriction on future
development in a form acceptable to the review authority with the Gallatin County Clerk
and Recorder:
1. An annexation that expressly defers this section under an annexation agreement;
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2. Individual lots of a subdivision final plat planned for future multiple-household
development;
3. Individual lots of a subdivision final plat planned for future commercial, industrial,
or institutional development, or;
4. Future phases of a phased site development.
D. The city will determine the estimated increase in annual municipal water demand
attributable to the development. The applicant must offset the estimated increase in
annual municipal water demand attributable to the development through one or more of
the following means:
1. Transfer of water rights into city ownership that are appurtenant to or associated
with the land being developed, or other water rights available from a water bank
or similar organization that may be available for transfer, that the city determines
are adequate to offset all or a portion of the municipal water demands
attributable to the development.
2. Implementation of onsite and/or offsite water efficiency and conservation
measures that reduce or offset the estimated annual municipal water demand
attributable to the development by one or more of the following methods:
a. Installation of high-efficiency indoor water using fixtures,
appliances, and products that are more water efficient than city-adopted
plumbing codes or state or federal minimum standards.
b. Installation of unirrigated, or minimally irrigated, drought resistant
or drought-tolerant landscaping that is more water conserving than the
minimum requirements outlined in the most recent version of the City of
Bozeman Landscape and Irrigation Performance and Design Standards
Manual and this chapter.
c. Installation of high efficiency or water conserving irrigation
componentry that exceeds the minimum requirements outlined in the
most recent version of the City of Bozeman Landscape and Irrigation
Performance and Design Standards Manual and this chapter.
d. Installation of non-potable water supply systems for landscaping
irrigation purposes.
e. Other water efficiency and conservation methods brought forward
as part of the development by the applicant that the review authority may
at its discretion approve.
3. Payment to the city of cash-in-lieu of water rights for that portion of the estimated
annual municipal water demand attributable to the development that is not offset
under 1. or 2. above.
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E. The unit cost for payment of cash-in-lieu of water rights will be established by city
commission resolution. The cash-in-lieu of water rights payment amount provided by the
applicant under subsection D.3 must be calculated using the unit cost effective on the date
the payment is made to the city. The director of utilities must deposit all payments received
under this section, upon receipt, in the cash-in-lieu of water rights fund.
F. The disposition or transfer of any existing water rights appurtenant to or associated with
the lands upon which development is proposed that are determined by the city to be
adequate to offset all or a portion of the estimated municipal water demands attributable
to the development must be consistent with an annexation agreement, condition of
approval, or water adequacy agreement, as applicable.
1. Any other water rights associated with the land that are not transferred to the
City, or are not intended to be put to beneficial use within the development, must
either be severed from the land or terminated by the water rights owner.
2. A subdivider or other developer must:
a. Reserve all or a portion of the appropriation water rights owned by the
owner of the subject property, transfer the water rights to a single entity for use
by landowners within the subdivision or other development who have a legal right
to the water, and reserve and sever any remaining surface water rights from the
land;
b. If the land to be subdivided or otherwise developed is subject to a contract
or interest in a public or private entity formed to provide the use of a water right
on the subdivision lots, establish a landowner's water use agreement that is
administered through a single entity and that specifies administration and the
rights and responsibilities of landowners within the subdivision who have a legal
right and access to the water; or
c. Reserve and sever all surface water rights from the land;
d. Prior to severing water rights from the land the subdivider or other
developer must consult with the city on whether the water rights are suitable to
meet the requirements of this section. The city may require transfer of water
rights to mitigate impact of development.
G. The city manager must adopt, and may from time to time amend, administrative
procedures to implement this section. The administrative procedures may include, but are
not limited to, the following items:
1. Standards established by the director of utilities to determine the estimated
increase in annual municipal water demand attributable to development.
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2. Standards established by the director of utilities to determine water demand
offset amounts for implementation of water efficiency and conservation
measures.
3. Standards established by the director of utilities governing the determination of
adequacy of water rights transferred into city ownership and the amount of water
demand offsets for an adequate water rights transfer.
4. Standards established by the director of utilities that establish and govern the use
of water adequacy credits for that portion of demand offsets provided by an
applicant that are in excess of the estimated increase in annual municipal water
demand attributable to the development.
5. A process that provides for administrative appeals of determinations made by the
director of utilities under this section.
6. Standards governing acceptance of water right transfers into city ownership. The
standards may require a water adequacy agreement to be entered into between
the city and development applicant that at a minimum provides for performance
guarantees, security against defaults, the establishment and use of water demand
offsets or water adequacy credits, and recordation with the Gallatin County Clerk
and Recorder.
7. Standards that incentivize the transfer of water rights to the city which have the
greatest utility to the city and future development.
Section 2
Repealer.
All provisions of the ordinances of the City of Bozeman in conflict with the provisions of
this ordinance are, and the same are hereby, repealed and all other provisions of the ordinances
of the City of Bozeman not in conflict with the provisions of this ordinance shall remain in full
force and effect.
Section 3
Savings Provision.
This Ordinance does not affect the rights and duties that matured, penalties that were
incurred or proceedings that were begun before the effective date of this Ordinance. All other
provisions of the Bozeman Municipal Code not amended by this Ordinance shall remain in full
force and effect.
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Section 4
Severability.
That should any sentence, paragraph, subdivision, clause, phrase or section of this
Ordinance be adjudged or held to be unconstitutional, illegal, or invalid, the same shall not affect
the validity of this Ordinance as a whole, or any part or provision thereof, other than the part so
decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the Bozeman
Municipal Code as a whole.
Section 5
Codification.
The provisions of Section 1 of this Ordinance shall be codified in Chapter 40, Article 2 of
the Bozeman Municipal Code.
Section 6
Effective Date.
This Ordinance shall be in full force and effect thirty (30) days after final adoption.
PROVISIONALLY ADOPTED by the City Commission of the City of Bozeman, Montana, on
first reading at a regular session held on the 15th day of September 2026.
____________________________________
JOEY MORRISON
Mayor
ATTEST:
____________________________________
MIKE MAAS
City Clerk
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FINALLY PASSED, ADOPTED AND APPROVED by the City Commission of the City of
Bozeman, Montana on second reading at a regular session thereof held on the 20th of October
2026. The effective date of this ordinance is November 19, 2026.
_________________________________
JOEY MORRISON
Mayor
ATTEST:
_______________________________
MIKE MAAS
City Clerk
APPROVED AS TO FORM:
_________________________________
GREG SULLIVAN
City Attorney
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