From The Pueblo Chieftain (Chris Woodka):

High Line shareholders Monday agreed to Aurora’s request for more engineering on the ditch that sold Aurora water in a lease agreement to speed the city’s recovery from the 2002 drought. The decision came after a long day of re-examining the past deal with Aurora, complaints from shareholders that they are not being kept informed and debates about the merits of forming a leasing company vs. joining the Super Ditch. “We want to know if we should begin working on the engineering to move forward to get a permanent water right to lease to Aurora or others,” said Tom Simpson, Aurora engineering supervisor for the Arkansas Valley. “Do the shareholders want to move forward?” About five hours later, shareholders voted to allow Aurora to continue the engineering studies that will make future water deals easier.

Aurora and the High Line Canal jointly filed for an exchange water right in 2005 after a two-year lease program that was deemed successful by all involved. Aurora was able to replenish its badly depleted reservoirs, while High Line farmers had an instant source of income after a couple of tough farming years. The exchange right, however, still would require a substitute water supply plan from the state Division of Water Resources. Aurora wants to get started on a change of use decree in water court because it would save time in the future…

Simpson said the 2008 agreement is merely a framework and does not obligate shareholders. In fact, it benefits High Line by providing a $15,000-$25,000 annual maintenance payment. In the past two years, High Line has taken the payment by leasing water from Aurora for prices of $5-$10 per acre-foot. “We did not intend to say that anyone has to lease to Aurora rather than anyone else,” Simpson said. Aurora also has had preliminary discussions with the board about long-term leases in the future. The city is limited by a 2003 agreement with the Southeastern Colorado Water Conservancy District about how much water it can lease from the Arkansas Valley.

High Line is also exploring forming its own water leasing company, Superintendent Dan Henrichs said, in explaining a $70,000 grant from the Colorado Water Conservation Board. The canal wants to spend $30,000 of that toward setting up a company, and $40,000 to study water quality at the point on the river near its headgate. The idea would be to build a pipeline on land the canal owns on the north side of the river to serve customers in northern El Paso County or the South Platte River basin, Henrichs said. Other ditches could be brought into the plan, which might not materialize for 25 years, Henrichs said…

One board member candidly expressed his dismay over the afternoon’s arguments: “I’m disappointed,” said Vernon John Proctor. “I thought we were going to have a meeting about what was best for the High Line Canal Co., not talk about the Super Ditch and the Lower Ark.”

More coverage of the meeting from Chris Woodka writing for The Pueblo Chieftain. From the article:

The biggest immediate problem facing the 87-mile-long ditch in Pueblo and Otero counties includes a stretch of canal that has washed out in recent years. If the canal were to break during irrigation season, it could mean three months without water for 23,000 acres of farmland.

The ditch company also had to take out a loan to build a new caretaker’s home at Boone and spend down reserves to repair another house in Manzanola. Those are the type of routine concerns large ditches traditionally face. But much of Superintendent Dan Henrichs’ time is spent outside the routine jobs, attending regional or state water meetings on behalf of the High Line board. He also is developing a project that eventually could lead to a program to sell water through leases outside the ditch.

In 2008, Henrichs applied for a $325,000 state grant to fund steps that lead to a leasing program, a future pipeline north and water quality studies. The ditch company was awarded $70,000 for part of the studies by the Colorado Water Conservation Board. “The board’s thinking in applying for the grant was maximizing the value of our water,” the board’s president, Stan Fedde, told shareholders who questioned why the canal company was moving in that direction…

Many farmers are older, and may be looking to retire. Selling water at higher prices is a way to pay off debts or may be the closest thing they have to a 401(k) plan. That’s played out in different ways throughout the valley in the past few years:

Most of the remaining shares on the Rocky Ford Ditch were sold to Aurora, which bought half of the ditch in the 1980s. Aurora and Colorado Springs bought the vast majority of the Colorado Canal in the 1980s as well.
The Fort Lyon Canal agreed to allow High Plains A&M (now Pure Cycle) to move water from the canal as long as it was done in rotation. High Plains bought about 20 percent of the ditch.
Nearly half of farms on the Amity Canal were purchased by the Tri-State Generation and Transmission Association in order to use the water in future power projects.
The Pueblo Board of Water Works bought 27 percent of shares on the Bessemer Ditch for future water use.

The High Line was faced with the same pressures during the drought and many shareholders were looking at selling. Instead, they held on to their water rights by selling water to Aurora under a lease agreement…

The arrangement with Aurora has had other benefits for the ditch, other than an infusion of cash that paid down debt, bought new equipment and allowed repairs on farms. Aurora improved structures on the ditch and built an augmentation station that will allow future leases. Henrichs pointed out that Aurora has helped High Line by providing crews to burn ditches when weeds became a problem. Shareholders Monday also recognized the value of Aurora’s engineering studies of the canal, voting to give the city permission to develop more studies toward a 2005 exchange case and Aurora’s plans for an upcoming water court case to change the use of High Line water. The Aurora lease agreement also opened the door for other cooperative ventures. The High Line wants to draw in other canals, at the ditch-board level, to sell water. Meanwhile, the Super Ditch has formed with shareholders from seven canals and an agreement in hand to enter a long-term lease with Pikes Peak Regional Water Authority in 2011.

More Arkansas River Basin coverage here.