From The Loveland Reporter-Herald (Carina Julig):
Water in Loveland comes from the Colorado-Big Thompson Project, which diverts water over the Continental Divide to the Front Range. Over the past several years, units of water from the project have soared in price as Northern Colorado’s population has grown and development increases.
From 2010 to 2019, the average price of C-BT units rose from $7,000 to $55,000. The amount of water in a C-BT unit is set yearly by the Northern Colorado Water Conservancy District — Northern Water — and fluctuates based on the amount of snowpack and forecast streamflows for that year. In 2019, it was set at 70 percent of an acre-foot…
The city of Loveland requires developers to bring their own water rights to a project or to purchase water from the city. The city’s cash-in-lieu price for water rights is pegged to the market value and has steadily risen alongside it.
At the Loveland Utilities Commission meeting Dec. 18, the city approved raising the cash-in-lieu price of C-BT units to $47,640. It last raised the price in July to $39,330.
The city asks developers to pay their own way so that they don’t cut into the city’s water resources for the future, said Joe Bernosky, the director of Loveland Water and Power.
“What we’re doing is we’re to trying to make them pay their own way so the existing citizens don’t have to pay or we don’t kick the can down the road,” Bernosky said. “And that’s not a good way to do business when you’re a utility.”
Cash-in-lieu money the city receives from developers all goes toward firming up the city’s water portfolio, said Larry Howard, a senior civil engineer in the Water and Power utility.
There’s no profit incentive to increasing the cash-in-lieu price, Howard stressed. The city is just reacting to market conditions and doesn’t have a lot of options.
The rising cost of water is making it harder to build more affordable housing in Loveland, something the city badly needs. Jeff Feneis, director of the Loveland Housing Authority, said water rights are one of the organization’s biggest challenges.
In order to help mitigate the increasing cost of water, the city recently recalculated the water rights necessary per building unit. The change, which went into effect this September, applies only to residential buildings.
Due to more efficient building practices such as more efficient appliances, new houses require less water than older ones do. In light of this, the city reduced the required amount of water for a single-family dwelling from about one-quarter of an acre-foot to about one-tenth.