From The Pueblo Chieftain (Chris Woodka):
A hearing next week on a plan to dry up about 6,700 acres on the Fort Lyon Canal has been canceled because some shareholders have complained about potential conflicts of interest.
The Fort Lyon board made the decision Tuesday night after about 10 percent of the shareholders filed a petition alleging conflicts with the canal company’s attorney and engineer. The move cancels the Feb. 11-12 hearings that were planned in Las Animas.
The hearing is for Arkansas River Farms, which bought 14,600 acres of Fort Lyon farms for $53 million last year and announced plans to dry up some of the ground at the annual meeting in December. Fort Lyon shareholders agreed to a public hearing to resolve some issues before a change of use application is filed in water court.
John Lefferdink, the attorney for the Fort Lyon Canal Co., is related by marriage to Bill Grasmick, who is working with Karl Nyquist for Arkansas River Farms.
Duane Helton, the engineer for Arkansas River Farms, was the Fort Lyon Canal’s engineer for 35 years. Tom Williamsen, the canal’s engineer, was Helton’s partner before Helton went into business for himself.
“I didn’t feel there was a conflict of interest,” said Dale Mauch, a board member of the Fort Lyon Canal. “If anything, John (Lefferdink) would be even more conservative in dealing with this.”
But the Fort Lyon board has decided to seek an outside attorney and engineer because of the potential that any decision made by the shareholders at next week’s meeting would not stand in court, Mauch said.
“We felt like we didn’t have a choice,” Mauch said. “Why go through the proceedings if they are going to be challenged?”
The hearing could be rescheduled as soon as April, or as far off as July. The board does not want to schedule it in May or June, when farmers will be busiest in the fields.
Arkansas River Farms, an affiliate of C&A Companies and Resource Land Holdings wanted to move ahead with its plans to use water from the dried-up farms as part of wellaugmentation plans this year. The water would replace depletions from wells further downstream, and a plan has to be filed with the state engineer by March 1.
C&A is the parent company of GP Resources, which announced a plan in 2011 to pipe treated water from the Lamar Canal to the Front Range. That plan has been put on hold in favor of new plans for a large dairy in Prowers County.
The farms on the Fort Lyon Canal were purchased from Pure Cycle Corp., which bought them from High Plains A& M. Those companies once planned to move the water off the farms to Front Range communities.
