The July 2020 newsletter is hot off the presses from the #ColoradoRiver District

Andy Mueller, the general manager of the Colorado River District, addressing a crowd of 265 water managers, users and stakeholders in Grand Junction [September 2018] at a River District seminar called ‘Risky business on the Colorado River.’ Mueller spelled out six principles the River District wants the state to embrace as it develops a ‘demand management’ program designed to get the state’s water users to reduce their water use in order to bolster levels in Lake Powell.

Click here to read the newsletter. Here’s an excerpt:

General Manager Andy Mueller recommends financial security for West Slope water security

The Colorado River is under tremendous strain. In seven states and two countries over 40 million people rely upon the river for their drinking water and millions more throughout the United States are fed by the more than three million acres of irrigated agriculture that the river supports. The number of people served by the river is expected to hit at least 70 million by 2060.

Long term drought and rising temperatures mean that we have less water flowing in the river. Over 60% of the river’s natural flow originates within the boundaries of the Colorado River District. As the population grows, and the river flows continue to diminish, we are experiencing greater pressure on this limited resource.

There is widespread recognition that the river is out of balance and there are many suggestions as to how the river should be brought back into balance. Many of the suggestions being promoted by Lower Basin states and major metropolitan areas focus on reducing water use in places like our District; people such as former U.S. Secretary of the Interior Bruce Babbitt are calling for a redistribution of water from our agricultural communities to the urbanized Lower Basin. Never has it been so clear that the people of Western Colorado need a strong advocate at the water policy table who can speak for the West Slope with a unified voice, leading in the protection, conservation, use and development of the waters of the Colorado River for the residents and environment within our District. That voice is your Colorado River District.

Unfortunately, even before the current pandemic-inspired economic upheaval, the Colorado River District was facing a declining revenue stream. Declining tax revenues from the fossil fuel industry, losses caused by the Gallagher Amendment and the effects of the Taxpayers’ Bill of Rights (TABOR) Amendment are conspiring to drive the District’s income into significantly negative territory. The most recent state predictions for 2021 indicate that the Gallagher Amendment alone will likely cause the District to lose approximately $425,000 in the District’s General Fund budget.

Our flat and decreasing revenue led District management in the last 18 months to reduce the District work force by 4 positions or 15%, suspend our grant program, reduce the District vehicle fleet and implement across-the-board reductions in expenses. Even with these cost-saving measures, our financial projections indicate that the District will have to reduce its work force again as soon as 2022. While the District to date has been able to tighten its belt and successfully accomplish our core mission, our ability to protect the West Slope’s water security in the future will be significantly compromised through the loss of additional staff positions and proper resources.

Additionally, as our communities face the dual challenges of increasing demand on the Colorado River and reduction in the flow of the river, important West Slope priorities are not being accomplished because they are unfunded. West Slope communities through the three Basin Roundtables in our District have identified priority projects that are essential for water security. The unfunded water priorities span the full range of needs in all categories, including productive agriculture, infrastructure, healthy rivers, watershed health and water quality, conservation and efficiency.

In the recent past, advocacy and creative problem-solving by the District staff have enabled the District to serve as a catalyst for important projects. However, without the ability to bring money to the table we often find ourselves negotiating with our hands out and very little ability to influence the selection and direction of projects. As the District and our water users are forced to turn empty handed to the federal or state government for funding, we find the priorities of the state and federal governments, not those of the West Slope, are dictating the type, location and scope of projects.

The District was founded to lead in the protection, conservation, use and development of the water resources of the Colorado River basin for the welfare of the District. In 1937, at the request of West Slope leaders, the District was authorized to collect up to 2.5 mills in property tax. Today, due to a variety of reasons, the District’s mill levy is capped at 0.252 and its current, effective mill levy is set at .235 mills…less than one-tenth of its original authorization. The District’s ability to fulfill its mission and protect the West Slope is significantly hampered by declining revenue.

In January I recommended to the Colorado River District Board that it consider placing a question on the Nov. 3, 2020 ballot asking voters to approve an increase of the District’s taxing authority to up to 0.5 mills. The recommended increase is predicted on generating approximately $4.9 million in additional revenue per year at a cost of approximately $1.90 per $100,000 in residential value, which is equivalent to a tax increase of $6.34 annually for the median-priced home in the District.

The Board is still contemplating my recommendation. In January, Board members asked the staff to conduct additional outreach and public opinion research. We commenced that outreach through public forums and started discussions with Boards of County Commissioners. We arranged for public opinion polling to take place in the second half of March before the April Board meeting.

Unfortunately, by mid-March the coronavirus pandemic swept through Colorado and shut down our communities, wreaking economic havoc and interfering with our ability to conduct significant portions of our planned public outreach through districtwide events known as our State of the River meetings.

Our polling conducted in late March, after the closure of the ski areas and during the shut-down of the rest of the state, came back showing strong public support for the recommended tax increase. Specifically, the poll indicated that 65% of the likely voters polled were in favor of the measure. The poll showed widespread support across the political spectrum and throughout the District. The poll also showed incredibly strong support for the mission of the District indicating that projects that focus on water security in Western Colorado are funding priorities for residents throughout the District.

In April, society was coming to terms with the long-term economic effects of the pandemic and the Board and staff expressed concern about moving ahead with any tax increase, no matter how small. The Board requested that staff continue to engage in outreach to the public and county leadership and requested that polling be conducted closer to the July quarterly meeting so that we would have a better, more current understanding of public support for this potential ballot measure.

The additional polling was conducted at the beginning of July, and the report is still being finalized at the time of this writing. Preliminary reports from our research firm indicate that support in early July for the District and the potential tax increase remain high. 63% of likely voters polled support the tax increase. When informed that the increase would be modest, i.e. $1.90 per $100,000 in residential value, support for the measure climbed to 67%, identical to the informed support in March. Based upon our outreach to political and civic leaders in the District, there is generally widespread, but not unanimous support for the proposed ballot measure.

We have heard from the public, water-user entities and elected officials that it is incredibly important that the District Board and staff publicly commit to how the funds will be spent by the District. Our Board is contemplating the draft Fiscal Implementation Plan, which if adopted, will outline the District’s commitment as to how it would spend the additional revenue.

In summary, the plan calls for the District to allocate approximately 86% or $4.2 million of the anticipated annual revenue to partnership projects in the District, prioritizing multi-purpose projects that meet needs in one or more of the following five categories: productive agriculture, infrastructure, healthy rivers, watershed health and water quality, conservation and efficiency. The plan commits the District to expending funds in an equitable manner which, over time, disperses the benefits of the program geographically within the District boundaries and among the identified categories. The plan also commits the District to utilizing these funds to drive the initiation and completion of projects that are priorities for residents of the District by utilizing District funds as a catalyst for matching funds from state, federal and private foundation sources.

The Fiscal Implementation Plan itself has greater detail. The remaining approximately 14% of the funds will be utilized by the District to fix the District’s internal financial structural deficit caused by the cumulative impact of the Gallagher Amendment, the decline of tax revenue from the fossil fuel industry and TABOR revenue limitations. The District will not utilize the new revenue to create additional staff positions but will allocate the money to fund existing staff positions and business-related expenses. This allocation will help to ensure the financial integrity of the important work of the River District’s Enterprise Fund by preserving enterprise reserves for anticipated capital expenses and critical maintenance and repair work on water-supply assets owned by the District.

At our July meeting, the Board will be considering my recommendation and of course, the thoughts and concerns of the public. The Board may decide that the time is right to ask the voters for approval for a tax increase. The staff and Board welcome the public to attend, listen and comment on this important decision.

The public can listen to the meeting by visiting http://ColoradoRiverDistrict.com and navigating to the District’s YouTube channel.

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