Cañon City could see lawsuit from two ditch companies for routing stormwater to ditch easements

This graphic shows the estimated cost for upgrades, repairs and maintenance of each stormwater basin. (City of Cañon City)

From The Cañon City Daily Record ( Carie Canterbury):

A second local ditch company is making preparations to potentially sue the City of Cañon City for allegedly utilizing irrigation ditches as a stormwater utility.

During Monday’s city council meeting, former mayor George Turner, who also serves as the secretary/treasurer for the Cañon City & Oil Creek Ditch Company, said the city has been putting off stormwater improvements for the last 150 years and utilizing the irrigation ditches in the community as its stormwater utility…

He said the Hydraulic Ditch Company has increased its assessment by $2 a share and the Cañon City & Oil Creek Ditch Company has increased its assessment by $5 per share for the sole purpose to generate a fund to hire water attorneys to potentially sue the city.

Mannie Colon, the president of the Cañon City Hydraulic & Irrigating Ditch Company, initiated litigation last year against the city when he felt his solutions to the decades-long stormwater problems had been dismissed and not adequately implemented.

In response, a stormwater task force consisting of representatives from the City of Cañon City, Fremont County and local ditch companies was formed in March 2017 to look at solutions.

The city, county and the Hydraulic & Irrigating Ditch Company recently mutually have agreed to fund a $180,000 study to investigate and mitigate stormwater flooding of the ditch. The city council earlier this month approved a tolling agreement that preserves any legal right the ditch company believes it may have against the city and county for stormwater flooding while also maintaining the rights, claims or defenses of the city and county.

The city contends that the cost of stormwater mitigation has gone up, but fees haven’t.

The fee hasn’t increased in 10 years, and the city has an operating fund deficit in the stormwater fund that is compounded by a $75 million capital project backlog.

In order to get the utility back in the black, fees would need to double, which also would provide for about $4 million in capital improvements during the next 10 years. Second reading of an ordinance that would double stormwater fees was tabled during Monday’s meeting.

Some members of the public said they don’t mind increasing the fees, but they felt doubling them was much too excessive. However, City Administrator Tony O’Rourke said to meet the entire capital needs for the stormwater problem, the rate would have to increase in a rate in excess of 1,000 percent.

During Monday’s meeting, there was much discussion about an effort to get county officials to take more of an active role in the stormwater problem.

Stormwater is collected in eight drainage basins within the city and Fremont County. The city physically only represents 18 percent of the area within these eight drainage basins, the other 82 percent is in the unincorporated area of Fremont County, which does not impose a stormwater fee for those residents.

“The drainage basins are in the county, and that’s who should be helping us pay for this,” Mayor Preston Troutman said.

Councilman Mark Gill pointed out that on a $220,000 home, Cañon City receives about $46 in property taxes while the county receives about $197…

The city is looking to create a regional stormwater basin authority, where all the residents within the eight basins would share the cost of stormwater management. This requires the support and concurrence of the Fremont County Commissioners who would have to approve a service plan before it could go before voters for approval.

Former Councilman Dennis Wied said doubling the stormwater fee is particularly unfair to businesses. He said there are 1,000 business properties in town, and 5,000 residential properties, but the businesses pay 52 percent of the total stormwater fee. Additionally, he said a proposed stormwater impact fee would go from about $750 per acre to about $11,000 an acre…

Other citizens asked for an explanation on how money in the stormwater fund is spent, specifically a $620,600 transfer to other funds.

City Engineer Adam Lancaster said the majority of the money is spent on maintenance and a great deal is spent on compliance with the city’s MS-4 stormwater permit. Some funds are spent for a local contractor for maintenance and an inter-fund transfer also is used for the city’s street crews to do some maintenance…

Wied said when the stormwater fee was first instituted, it was for the purpose to build up funds to address stormwater problems, not day-to-day operations. He said 100 percent of the city’s street sweeper is being charged to the stormwater fund, which he alleges just started recently…

Wied also said that 20 percent of the time spent by 14 people in the street department is charged to the stormwater fund…

A study analysis being conducted by an independent consultant is looking into how inter-fund transfers have been calculated. O’Rourke said preliminary results indicate that the city has not been charging the stormwater fund sufficiently, and the general fund is continuing to subsidize that fund by about $180,000 in addition to what it currently transfers. It is in violation of TABOR for the city to supplement the stormwater fund with the general fund, he said.

Wied said the city, staff and the council the last 11 years have been fully aware of expenses that can and must be charged to a utility and those that don’t. He took exception to the comments made that certain fees have to be charged to the stormwater fund…

Finance Director Harry Patel said since 2006, cost allocations have been moved from the general fund into the stormwater fund, and he will provide documentation during an upcoming meeting. The fund transfers were in council-approved budgets and on audited statements, he said.

The council agreed to table the discussion to the next general government meeting that will be at 4 p.m. March 7 at City Hall.

Councilwoman Ashley Smith asked that city staff bring back an in-depth analysis of spending and allocation requirements, as well as a state of future plans and proposed projects.

Cañon City photo credit DowntownCañonCity.com

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