From The Greeley Tribune (Catharine Sweeney):
As Greeley attempts to maintain its outward growth, booming water prices could slow it down.
The Greeley City Council on Tuesday held a work session on a water policy called “cash in lieu,” which allows developers to buy water access when a property’s existing supply is short of its city-mandated requirements.
Some developers already use the process, but it’s rare right now, said Water and Sewer Director Burt Knight. It’s going to become more common as Greeley continues to expand.
“Over time, there will be no more water to dedicate to the city,” said Eric Reckentine, deputy director of water resources.
Optimistic estimates give Greeley 40 years until cash in lieu water development is the norm. Pessimistic ones give it 10 years.
City officials contracted a firm to study Greeley’s cash in lieu policies and the options they have to modify it going forward.
If someone buys a pre-owned house in Greeley, for example, its water has already been set up. If a new house goes up in a developed area of town, it can use existing water infrastructure. If a new house goes up in an undeveloped area, often the property comes with water rights — access to a river or ditch that it gives to the city in exchange for access to treated water that comes out of a pipe.
But the land Greeley has left to develop is exceedingly short on water rights. Sometimes it’s because the land is far away from water. Other times, farmers have sold their water rights and later sold their land without them.
In this situation, the developer has to find a way to bring more water into the Greeley water system.
That water also is getting more expensive.
Water planners use the price of Colorado-Big Thompson access as a benchmark. For years, C-BT prices increased at about 13 percent a year. In the past three, the price has tripled, said Douglas Jeavons, managing director of BBC Research and Consulting, the contractor Greeley used for the study.
As cash in lieu policies become more common across the region, the price will continue to grow.
“There may not be very much C-BT left and changing hands at that point in time,” he said.
Greeley’s price for cash in lieu water is about $25,000 per acre foot, which BBC found was high compared to other communities.
For the city to acquire new water, it’s about $16,000 per acre foot, Jeavons said. It might be cheaper, but there is more uncertainty.
For example, one way to acquire more water is to build more reservoirs. Greeley is in the permit process for new ones, but those might fall through.
Developers, Realtors and economic development advocates already have issues with paying $25,000 to the city for water, according to the BBC report.
They say the city’s water amount requirements on new development — three acre feet of water per acre of land — and the costs associated with them are too high.
The report found that the required amount is standard throughout the northern Front Range, but the cost is $5,000 higher than average.
Changes in price as well as requirement amounts and charging processes will be discussed further by members of the Greeley Water and Sewer Board in an upcoming meeting.