Bessemer Ditch: Bylaws changes sparking conflict

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The Pueblo Board of Water Works is trying to buy shares of the Bessemer Ditch as part of a strategy to lessen the city’s dependence on transmountain water — and to make sure that Pueblo can keep growing of course. The purchase requires changes in the bylaws of the ditch association and that has some of the ditch members alarmed. They’re mounting opposition to the changes according to a report from Chris Woodka writing for the Pueblo Chieftain. From the article:

On one end of the [issue] are the Pueblo Board of Water Works, St. Charles Mesa Water District and those who want to sell to the water board. At the other end are numerous small shareholders who say that the 1894 articles of incorporation and bylaws of the ditch company should not be changed. Neighbors and families are in disagreement about what to do, and a historic decision could be made at a special meeting of shareholders at 6 p.m. May 11 at the Pueblo Convention Center.

Both sides have mailed or handed out a flurry of information in preparation of the meeting to try to sway shareholders. As a mutual ditch association, the decision is up to private water rights holders, just like other water transfers in the Arkansas River basin over the past 50 years have been…

The almost 900 shareholders have stakes ranging from just one share to several hundred. The St. Charles water district has about 2,000 of the 20,000 shares on the ditch. The Pueblo water board wants to buy 5,000 shares, mostly for future needs and to keep thirsty cities to the north from raiding the local canal. In order to do that, however, the water board wants clear direction from the Bessemer shareholders that it will be able to use the water in the future. “We will be investing a large sum of money in these shares and we must protect that investment by amending the governing documents to give us the opportunity to move the shares out the ditch when needed in the future,” water board Executive Director Alan Hamel said in a letter to shareholders…

The Pueblo and St. Charles water boards have committed to use the water within Pueblo County, but the possibility of using the water outside the county would remain in the bylaws at the request of the Bessemer Ditch board, in order to maintain maximum value. The water board also has committed to make improvements on the ditch and lease back the water to shareholders, and states its aims in a way that tries to convince non-sellers they would be hurting neighbors by resisting the changes.

“The effect of not approving the changes to the governing documents is that your friends and neighbors who want to sell will not be able to sell their shares to the Board of Water Works, or any other entity that want to use the water outside the ditch,” Hamel stated.
Some of the shareholders of the Bessemer Ditch who want to sell have written their own letter asking for the cooperation of others, arguing that the change of bylaws will increase the value of everyone’s water rights. “If you have interest in leasing your water (perhaps to the Super Ditch) or selling in the future, then you’ll vote for the changes, allowing the water to be moved from the ditch,” the letter states. The letter is endorsed by 27 shareholders, most of whom are reportedly among those with contracts with the water board. They state that the negotiations between the St. Charles and Pueblo water boards have strengthened protections for shareholders who choose not to sell. The changes in the bylaws and articles of incorporation increase the value of water while maintaining the ability to farm and the quantity of water per share, they say, urging support of the changes.

Opponents of the bylaw changes have presented reasons not to change the bylaws for months. An analysis by Mike Bartolo, a small shareholder on the ditch and head of the Colorado State University Ag Research Center at Rocky Ford, claims the price per acre-foot in the current offer is a little more than $5,000 or roughly half of the cost per share, and criticizes the way the Pueblo water board has portrayed the price. Bartolo also urged shareholders to look at leasing as an opportunity and has joined the Super Ditch board on behalf of Bessemer shareholders. Leonard DiTomaso, who with Mike Klun was elected to the Bessemer Ditch board in January on promises to fight for preserving agriculture on the ditch, has been tireless in sending out letters to try to convince shareholders to leave things as they are. “Everyone I talk to, shareholders and non-shareholders, thinks our ditch should live forever,” DiTomaso said. “I agree. People like seeing our green irrigated farms. Most of the farms are well-managed and cared for.”

More Coyote Gulch coverage here and here.

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