From The Longmont Times-Call (Sam Lounsberry):
As ownership of Colorado-Big Thompson water units shifts from agricultural interests to municipal control, farmers in the Longmont and Boulder areas are becoming dependent on the cities’ water rental programs.
And with more municipal control of the Colorado-Big Thompson system, the market has changed in focus from acquisitions to leasing programs for farmers.
Colorado-Big Thompson units can be bought, sold and transferred between water users anywhere within its manager Northern Water’s eight-county region without new uses having to be approved by a state water court, even when a deal involves users in different native stream basins. For that reason, the units have been attractive to those looking to buy in the water market — especially real estate developers needing to dedicate raw water to a municipality or water district to annex in new structures for utility service.
Farmers own less, but still get half
When the Colorado-Big Thompson project made its first deliveries in 1957, more than 85 percent of its water was owned by agricultural users.
In 2018, though, municipal and industrial ownership of the 310,000 Colorado-Big Thompson water units…crept to 70 percent, leaving just 30 percent owned by agricultural users.
But more than half of the system’s water still has been delivered to farmers in recent years, according to Northern Water data.
That discrepancy reflects how much Colorado-Big Thompson water — originally intended to be a supplemental supply late in the growing season — farmers are renting from cities such as Boulder and Longmont.
‘Nearly out of range’
Boulder last year leased 7,690 acre-feet of water, including 6,950 acre-feet of Colorado-Big Thompson water, and has leased an average of 3,410 acre-feet per year since 2000; Longmont last year leased 612 acre-feet of Colorado-Big Thompson water, along with some city shares of supply ditches that deliver water from native sources such as the St. Vrain River and Left Hand Creek, figures provided by the cities show.
Longmont revenues generated by its water rental program over the last four years total nearly $3.9 million; Boulder has generated $861,850. The reason for the discrepancy in revenue despite Boulder renting more Colorado-Big Thompson water than Longmont is Longmont rents more of its native water, and its rates for much of its Colorado-Big Thompson water are higher than Boulder’s.
But the rental market for water also is sliding out of reach for local farmers as outright purchases of Colorado-Big Thompson water have skyrocketed in price — units were sold for $36,000 apiece in an October auction. The water issue has been compounded by a weak commodity market for Front Range crops…
Northern Water in years wet enough to lease excess Colorado-Big Thompson water does so through a bidding system known as its regional pool, and how those bids shake out in the spring influences the overall rental market for water each year.
The minimum successful bid on an acre-foot of water in the spring 2010 regional pool was $22, but last year it was $132, Northern Water spokesman Brian Werner said, a six-fold increase over the decade.
No longer a ‘go-to’ supply
Developers aiming to annex housing into municipalities or water districts that don’t accept cash in lieu of dedicating new raw water units might be forced to look into acquiring shares of ditch companies delivering water from streams native to a city’s or district’s service area.
“We have 10 percent of that ag (Colorado-Big Thompson) supply yet to be transferred” to municipal or industrial control, Werner said, predicting about 20 percent of the system will likely stay under agricultural ownership for the foreseeable future.
“It’s slowed down. About 1 percent a year” is being transferred from ag to municipal and industrial control, Werner said. “Inside the next decade or so, (that system) goes off the table as a go-to water supply.”
Storage may preserve agriculture
With more interest in water markets individualized to native stream basins — as opposed to the trans-basin Colorado-Big Thompson market — applications to state water courts to change ownerships and uses of those native basin shares could pick up, as developers continue trying to satisfy their obligations to give new water to Northern Colorado’s growing municipalities.