It’s going to be difficult for legislators to strengthen Colorado’s already strong water anti-speculation laws, but that’s what a study group is looking at.
Joe Frank, manager of the Lower South Platte Water Conservancy District, told his board’s executive committee Tuesday it will be tough for the study group to come up with viable recommendations to the legislature.
The study group was authorized by Senate Bill 20-048 during the 2020 legislative session. The bill “requires the executive director of the department of natural resources to convene a work group to explore ways to strengthen current anti-speculation law and to report to the water resources review committee by August 15, 2021, regarding any recommended changes.”
Frank said the 18-member working group, which has been meeting since November 2020, is “a pretty diverse group,” and that has caused some concerns about the viability of recommendations that it may propose.
“The hard part, in my mind, is how you distinguish between traditional speculation and investment speculation, and how you protect people’s property rights,” Frank said. “How do you tell a landowner who he can and can’t sell his property to? (Some states have) laws about selling (farmland) to people outside the state, but I’ve talked to some (Colorado) tenants whose out-of-state landowners are really good landlords.”
Water speculation is generally thought of as buying water rights without having an immediate beneficial use for the water, hoping to later sell the water for a profit. The concern is that agricultural water would be taken off the land and sold out-of-state. Current water law requires that anyone buying water shares or buying ag land with a water right must have an immediate beneficial use for the water.
That has led to the practice “buy and dry,” in which cities and utilities buy agricultural land and use the water for their own purposes. One example is when Sterling purchased the Scalva Bros. farm in the early 2000s so it could use the farm’s strong water right to augment pumping for municipal use. Although the water is still being used to irrigate crops on the farm, eventually it will have to be taken off the cropland and the land returned to a natural state.
Board member Gene Manuello said anti-speculation legislation can be a double-edged sword. He referred to a 2009 Colorado Supreme Court decision in which the Pagosa Area Water and Sanitation District and San Juan Water Conservancy District were denied permission to build Dry Gulch Reservoir. Trout Unlimited sued the districts claiming their projections of water needs over the coming 50 years were excessive and amounted to water speculation.
The high court ruled that the Pagosa area water districts, which supply water to nearly all of Archuleta County, had not sufficiently demonstrated a need for the amount of water they claimed, based on projected population growth and water availability over a 50-year planning period…
A report on recommendations from the study group is due in mid-August, Frank said.
In other business Tuesday the executive committee when into executive session to discuss legal and negotiation issues concerning the proposed Fremont Butte project. That project would store excess South Platte River runoff in Prewitt Reservoir and a new reservoir south of there, to later be pumped upstream for use by the Parker Water and Sanitation District.
During a meeting on Nov. 16, the San Juan Water Conservancy District (SJWCD) Board of Directors approved the deactivation of a loan the district currently has with the Colorado Water Conservation Board (CWCB).
According to SJWCD President Al Pfister, the reasoning behind the decision is the state budget situation.
“The state was asking us whether we wanted to deactivate our existing loan of $1.9 plus million that we had applied for and had been approved contingent upon us getting a mill levy approved to pay for that,” Pfister explained during the meeting. “It’s been three years since that was initially approved and, I’ll say, standard procedure is to, basically, after three years of actions have been taken, they deactivate those loans.”
Pfister noted that he told CWCB that the district was fine with deactivating its loan at this time but, by doing this, it would not preclude the district from applying in the future.
“I just want to clearly emphasize that this does not in any way mean that we are not going to pursue a reservoir project in the future,” SJWCD board member John Porco added.
In conversations with CWCB representatives, Pfister explained that the CWCB indicated that CWCB would not take this decision to mean that SJWCD was not pursuing its San Juan River Headwaters Project…
The motion to approve the CWCB loan deactivation was approved unanimously by the SJWCD board.
In a follow-up interview on [November 23, 2020], Pfister explained that the loan that was deactivated was to enable the SJWCD to purchase additional lands that were needed to complete the district having ownership of the pool basin for the San Juan River Headwaters Project.
Additionally, the loan was for environmental work for the land exchange, Pfister added.
At a regular meeting of the San Juan Water Conservancy District (SJWCD) Board of Directors on Feb. 3, the board nominated a few direc- tors to sit in on a subcommittee related to the Running Iron Ranch and San Juan River Headwaters Proj- ect (formerly known as Dry Gulch Reservoir).
Chair Al Pfister and board mem- bers John Porco and Doug Secrist were nominated to be on the six- person subcommittee that will also consist of three members of the Pagosa Area Water and Sanitation District (PAWSD) board.
SJWCD board member Bill Hudson will serve as an alternate for SJWCD’s portion of the subcommittee.
This subcommittee was formed as a result of a joint work session between the SJWCD and PAWSD boards on Jan. 23.
At that work session, it was suggested that a subcommittee should be created to craft an intergovernmental agreement between the two organizations regarding the property and determine what should be done when the Weber leases on the property end in 2023 and for a potential reservoir project…
Also at the Feb. 3 meeting, the SJWCD board briefly discussed who to nominate to be appointed to the Pagosa Springs Urban Renewal Au- thority (URA) Commission.
The 11-member URA commission is set up to consist of the seven town council members, an elected member of the school board, one person appointed by the county commissioners, one mayoral appointee and one person appointed by the taxing districts that levy taxes within the URA boundaries.
A URA’s primary goal is to help redevelopment within the town, and tax-increment funding ( TIF) is a common source of funding for specific URA projects…
Also at the Feb. 3 meeting, following an executive session, the board advised its legal counsel, Jeffrey Kane, to settle various cases the district, along with PAWSD, has with BootJack Ranch.
In a follow-up interview on Feb. 4, Kane explained that there are five cases the SWJCD is a part of.
Two of those cases involve both PAWSD and SJWCD as applicants, while the other three, BootJack Ranch is the applicant, Kane explained.
“The motion that was carried gave me authority to prepare stipulations with certain terms and negoti- ate with the parties to try and settle the cases,” he said.
Also at the Feb. 3 meeting, the SJWCD board elected its officers for the year.
Al Pfister was voted to be chair of the board. He previously served as secretary. Susan Nossaman retained her seat as vice chair.
Porco was elected as secretary after having previously served as chair.
Click here to read the newsletter. Here’s an excerpt:
San Juan Water Conservancy District Proposed Mill Levy a No-Go
San Juan Water Conservancy District was disappointed in the results of the Tuesday election. SJWCD put forth a proposed mill levy (Ballot Measure 5A) to help fund the proposed San Juan Headwaters Project (previously known as Dry Gulch) raw water storage project. The measure did not pass.
The District needed to pass this measure as a means to pay debt servicing on a $2 Million loan secured from the Colorado Water Conservation Board this past May. The loan is contingent on securing a revenue source sufficient to pay the loan back.
The District knew, and this election confirmed, passage of a tax increase was an uphill effort. “The strategy we embarked on for this past election was educational. We truly felt that if we could inform voters that the failed effort to build a 35,000 acre foot reservoir that would cost $400 Million is not the same project now being proposed, which is an 11,000 acre foot reservoir costing $70 Million. Obviously, our education effort fell short,” stated Rod Proffitt, SJWCD President.
“Since we have few options to improve our revenues, it is highly likely we will again propose a mill levy increase this coming year,” added Proffitt. In the meantime, the District is heavily involved in local efforts to implement the objectives of the Colorado Water Plan.
Ballot Issue 5A, the San Juan Water Conservancy District’s (SJWCD) request for an increase to 1 mill to help with the land acquisition for and support the San Juan River Headwaters Project reservoir, was soundly defeated Tuesday, with 75.44 percent of voters against the measure (2,697 votes).
A total of 878 voters, or 24.56 per- cent, were in favor of the measure.
SJWCD board chair Rod Proffitt indicated Wednesday morning the district knew it would be an uphill battle and will now obtain feedback on the loss at the polls and “proceed accordingly.”
“The District was disappointed in the results, but we knew even when we negotiated the terms of the $2 Million loan with CWCB [the Colo- rado Water Conservation Board] that it would be a difficult challenge we might have to put in front of the vot- ers more than once,” Proffitt wrote in an email to SUN staff.
Proffitt added, “The facts have not changed. In fact, the need for this water storage project is becoming more apparent. CWCB and PAWSD agree this community may face a serious demand supply gap as early as 2024. The Growing Water Smart Group that formed this past summer and committed to endorsing a 3 Mile Plan and a Watershed Management Plan as good ways to integrated better land use Planning and wise water conservation also determined the best, most important thing we can do is arrive at a set of data and popula- tions projections we can agree on by consensus, and then use for planning purposes by the various entities responsible for infrastruc- ture needs is (sic) the community.”
The Pagosa Area Water and Sani- tation District (PAWSD) concluded, after hearing a presentation by Ray Finney, that it is still not interested in the San Juan River Headwaters/ Dry Gulch reservoir project.
Click here to read the newsletter. Here’s an excerpt:
Progress on the San Juan River Headwaters Project
San Juan Water Conservancy District announced it has changed the name of the “Dry Gulch Project” to the “San Juan River Headwaters Project”. The project has changed from a 35,000 AF reservoir to an 11,000 AF reservoir. The original cost estimate for the reservoir was in excess of $400 Million, it has now been reduced to that of a reservoir that will cost less than $100 Million. “The reduced cost is substantially due to changing from filling and re-filling by means of an electric pump station to the use of a syphon, which also has the advantage of having less operation expense and a longer useful life at lower maintenance”, said Rod Proffitt, President of San Juan Water Conservancy District
San Juan Water Conservancy District was awarded a $2 million loan from the Colorado Water Conservation Board at its meeting in Pagosa Springs this past May. *Please note the correction of the previous amount stated. The existing mill levy for San Juan Water Conservancy District (“the District”) is .316 of a mill (not $316.000 at stated in previous newsletter), which raises approximately $67,000 per year on property assessed within the District. If this measure is approved, the mill levy will be exactly what it was when the District was first formed in 1987 – One (1) mill. The issue will be on the ballot this November.
Rod Proffitt also stated that the San Juan Water Conservancy District is working with a number of stakeholders in Archuleta County to apply for funding from the Colorado Water Conservation Board to do a watershed management plan for the Upper San Juan River above Navajo Reservoir.
“The San Juan River is facing continuing demands on its water as the area’s population grows and existing uses adjust to changing conditions. The plan will ensure the river continues to benefit the natural habitat of the watershed, the non-consumptive uses of the river like tubing, fishing, and rafting” noted Proffitt.
During its regular meeting on June 12, the San Juan Water Conservancy District (SJWCD) board passed a resolution to go forward with a mill levy initiative that will appear on the ballot in November.
The resolution passed 4-1, with members Rod Proffitt, John Porco, Doug Secrist and Susan Nossaman voting in favor of the motion, and member Al Pfister voting against.
Board member Ray Finney was absent from the meeting.
The mill levy would help fund the proposed Dry Gulch raw water storage project, along with a $2 million dollar loan that is contingent upon the SJWCD successfully raising its mill levy to 1 mill from .316 mills during an upcoming election.
If the mill levy initiative passes in an upcoming election, the loan would come from the Colorado Water Conservation Board (CWCB).
The $2 million would be used to pay for pre-construction costs of a reservoir, which include acquiring more land for the project…
The motion passed 4-1.
What’s in a name?
The SJWCD board also discussed changing the name of the Dry Gulch project in the hopes of differentiating the 11,000-acre-foot project from the 35,000-acre-foot project that was the subject of a legal battle.
The board discussed possible name changes, such as the High Pasture Project, or the San Juan Headwaters Project.
The board then came up with the idea of each board member rat- ing the possible choices, and then deciding on a name during the next board meeting.
The San Juan Water Conservancy District (SJWCD) board discussed several aspects of its proposed Dry Gulch raw water storage project during its regular meeting Monday night, including loan nancing, a mill levy increase, contracts and new names for the project.
Among the decisions made at the meeting was approving a resolution allowing the district to apply for a $2 million loan to help acquire property needed for the project, as well as for preconstruc- tion expenses.
That loan, however, would be contingent upon the SJWCD successfully raising its mill levy to one mill during an upcoming election.
In introducing the topic to the board, chair Rod Profitt explained that he had already submitted the loan application to the Colo- rado Water Conservation Board (CWCB), but that the resolution would “essentially” formalize that application.
Profitt noted he would be appearing before the CWCB during that board’s meeting in May (to be held in Pagosa Springs) to see if the loan is approved, at which point the SJWCD would have to work on the mill levy increase being approved…
The resolution further states, “the costs to acquire the rest of the land needed for the reservoir basin and pre-construction expenses are expected to be $2,000,000.”
The 40-year loan, Proffitt explained during discussion, comes with a 2.75 percent interest rate, which mean debt-service pay- ments of about $96,129 per year.
One mill, he said in response to a question by board member Al Pfsiter, would raise about $213,000 per year, meaning the district would also have funding for other projects such as the stream management program…
The resolution passed 5-0, with board member Ray Finney absent from the meeting.
The board of directors for the San Juan Water Conservancy District (SJWCD) voted unanimously on June 29 to accept an agreement regarding the loan restructuring for the Dry Gulch water storage project with the Colorado Water Conservation Board (CWCB), following a green light from the Pagosa Area Water and Sanitation District (PAWSD) last week.
According to a letter drafted by Rod Proffitt, president of the SJWCD, the district has limited water storage capacity to meet future water needs. The demands placed on the district for wildfire protection, drought and habitat are great and unsustainable. A situation worsened by state officials who used water from a tributary of the San Juan to offset the over-appropriation of the Rio Grande.
The water needs of the community led the district to partner with PAWSD, with the goal of building a water storage facility.
The Dry Gulch water storage project was halted due to the recession and changes occurring within PAWSD leadership, which then changed the direction of the project altogether.
Here’s Part II of Bill Hudson’s essay on the Colorado Water Plan. Here’s an excerpt:
One thing becomes very clear when you start trying to understand the politics of water in Colorado. It’s a complicated mess of competing priorities. Like many states in the arid West, Colorado has historically rejected the riparian water rights law that governs most of the eastern U.S. According to riparian doctrine, the water in a river or stream belongs to the land owner who owns property adjoining that waterway. This doctrine copies elements of English and Spanish common law; ownership of the water rights are attached to the related property and usually cannot be sold except with the sale of the adjoining land.
But when American and European settlers began populating Colorado, the most profitable industry was mining, and unlike a farm — the basic economic unit for land private ownership prior to 1850 — a mine is very often established some distance from the nearest river. Some the lawyers and judges of Colorado came up with the “prior-appropriation doctrine.” That doctrine grants superior water rights to whichever water user made the earliest use of the water source, historically speaking. In Colorado, it doesn’t matter if your own property adjoining the river; it only matters that you made historical use of a water source.
A water user who began pulling one million gallons a year from the San Juan River in 1892, for example, has — in Colorado — the legal right to pull a full one million gallons out of the river each year, even if he leaves no water at all for anyone with a later (“junior”) water right.
And in Colorado, the owner of an 1892 water right, for example, can sell that water right without selling the land on which that water has been historically used. (Which makes no logical sense to me, but that’s how the Colorado courts have ruled.)
This is known as the Colorado doctrine, and it was adopted by many of the other states west of the Great Plains. It has worked reasonably well, apparently… so long as we had more water in the rivers than we needed each year.
But a couple of things have changed. Back when the Colorado doctrine was established, most people in Colorado made their living by farming, ranching or mining. They used water mainly to produce useful and necessary items. Today in Colorado, most of us use water to flush our toilets and water our lawns. Not exactly the production of useful items in the same sense. The Pagosa Daily Post, for example, uses not a drop of water in its production process (unless La Plata Electric Association happens to be buying hydro power.) We can certainly question whether any useful products are created.
The other thing that’s changed is the population of the West. In 1950, Colorado had about 1.3 million residents; the number today is 5.3 million.
If you take into account the seven Western states that signed the Colorado River Compact of 1922 — allocating each states’ water rights to the mighty Colorado River — we can see that the total population of the seven states in 1950 was about 14.5 million. (US Census.)
The total population today is 58.6 million.
The amount of water available to serve all these new residents has not increased. In fact, it may have decreased. Substantially.
As I mentioned, about two dozen people attended the Southwest Basin Roundtable presentation on November 17, and brought with them a range of concerns. Some were concerned about federal control or Colorado’s water. But mostly, I think, we talked about the pending water diversions by Colorado’s larger Front Range community’s — diversions that might draw water out of various West Slope watersheds and pipe it over the Continental Divide to water lawns and flush toilets in Denver and Colorado Springs. That’s a potent issue. The West Slope generates most of the water in Colorado, but most of the state’s population lives on the eastern side of the Rockies…
The users of Colorado’s water are varied, and their level of concern about water resources reflect the manner in which they use water. Families. Ranchers. Farmers. Industries. Fishermen. Boaters. These are the human users — the users that we normally include in water conversations. But we can also, if we so choose, consider other users of Colorado’s water: wild game animals, trees, grasses, fish, birds.
Mice. Earthworms. Ladybugs.
If we stop and consider, for a moment, how these other, non-human users interact with Colorado’s water resources, we can easily see a natural, conservative approach. Animals and trees use only what they need, and not a drop more.
In some places in the world, humans approach water in the same manner. They use only what they absolutely need and not a drop more. How much water, then, does a human social group need? Say, for example, a social group that grows food and operates industries and hosts tourists and raises families?
Colorado’s Water Plan sums up the primary challenges facing us, with this language:
“Colorado faces a financial gap in addressing future environmental, recreational, agricultural, and communal needs. Without adequate investment, Colorado cannot effectively address the above-listed challenges.”
Sometimes what appears to be a crisis is merely a lack of imagination, or an unreasonable attachment to an expectation.
According to a 2010 report by the The Food and Agriculture Organization of the United Nations, it requires about 1,122 gallons of water per day to supply the average American with his or her daily needs. This includes the water used to produce the food we eat, and the myriad other products we consume.
A person living in the Netherlands meets all his or her needs with about 465 gallons per day, less than half what we use here in America.
The same report notes that the average Israeli — living in a desert climate very similar to regions of the American West — meets his or her water needs with 204 gallons a day… less than one quarter the water used by a typical American.
If Colorado is truly facing water shortages of some kind — which is a story we hear regularly from people who run water districts and from people who profit from building massive water projects — how will we prioritize the use of our ever-more-precious water? Agricultural uses? Recreational uses? More suburban lawns?
“If we’re going to use taxpayer money to store more water, then I think the taxpayers ought to get a say in what that water gets used for. I don’t want to save water on the West Slope so there’s more water to irrigate golf courses in Denver. So I think, if you’re going to use taxpayer money, you have an obligation to the taxpayers.
“And I don’t think the taxpayers are going to say, ‘Yes, more golf courses.’ The taxpayers might say, ‘More food,’ or they might say, ‘More jobs.’ I’m not suggesting that we change the [prior-appropriation doctrine]; private water is private water. I get that. But public money makes the water public.”
Good comment. If we are going to use taxpayer money to store more water, here in Archuleta County, how will that water be used?
We might even ask a more direct question. If we are going to use taxpayer money to someday build Dry Gulch Reservoir — one of the four projects currently listed in the draft Southwest Basin Implementation Plan — shouldn’t the taxpayers have some say in how the reservoir’s stored water gets utilized?
The voters of Archuleta County have expressed their desires pretty clearly over the past three years, regarding the Dry Gulch Reservoir. They have elected five anti-Dry Gulch candidates to the five-member Pagosa Area Water and Sanitation District (PAWSD) board of directors, and the board currently does not show any additional reservoirs in their 25-year Capital Improvement Plan.
So then… why is the Dry Gulch boondoggle currently part of Colorado’s Water Plan? I believe the answer is pretty simple. The voters do not elect the members of the San Juan Water Conservancy District (SJWCD); they are appointed by Judge Greg Lyman, the same judge who approved the original water rights for Dry Gulch back in 2004. And it’s the SJWCD board that has somehow inserted a glaringly unpopular water project into a statewide planning document.
The SJWCD owns only a 10 percent interest in the Running Iron Ranch property northeast of downtown Pagosa, but it might require years of legal wrangling to separate PAWSD’s 90 percent interest in the property from SJWCD’s interest. Another alternative for partitioning the two water districts’ ownership of the reservoir site was proposed last winter by SJWCD president Rod Proffitt.
Following a contentious meeting with the PAWSD board, the SJWCD board had voted to continue moving forward with building an 11,000 acre-foot reservoir: “to give the project a chance to succeed,” as Mr. Proffitt once put it. Mr. Proffitt began talking to the Colorado Water Conservation Board (CWCB) — the state board that had provided PAWSD and SJWCD with the $10 million to buy the Running Iron Ranch — about giving PAWSD “some breathing room” on their loan, so PAWSD wouldn’t press to sell the land to reduce its debt. (PAWSD has a lot of debt at the moment.)
Suspension of payments, debt forgiveness and lower interest rates were all discussed, with Mr. Proffitt pitching ideas to both CWCB and PAWSD. Mr. Proffitt also approached the Southern Ute Tribe about them buying out PAWSD’s interest and becoming partners in the project.
The PAWSD board’s lead negotiator, Allan Bunch, continued to stress ‘partition’ as the best solution to the problem of joint ownership — an action that would likely force the sale of the ranch and drive a final stake into the heart of the zombie reservoir. But Mr. Proffitt was able to get the PAWSD board to consider a trade: $4.6 million in loan forgiveness from CWCB — if PAWSD would assign its Dry Gulch ownership to CWCB.
Numerous twists and turns later, the CWCB came back with a rather different offer. They explained that, legally, CWCB can’t own reservoir sites, so trading loan forgiveness for a share of the Dry Gulch property was not feasible.
But CWCB might be willing, they said, to lower the interest rate on PAWSD’s $9 million loan — if PAWSD and SJWCD would hold onto the property for 20 years, and then consider whether to build a reservoir there. If they did not build the reservoir by 2035, PAWSD would have to pay the remaining $4.6 million, plus interest, in a nice big balloon payment.
SJWCD would assume management of the Dry Gulch project. We might note that SJWCD currently cannot afford to hire any paid staff; apparently CWCB is comfortable asking a board of well-meaning volunteers to manage a $100 million water project. (I am simplifying the actual proposal somewhat, to make this article more readable.
More Colorado Water Plan coverage here. More Dry Gulch Reservoir coverage here and here.
We’re lucky here in Colorado. When we grow weary of ordinary, everyday political controversies — federal immigration policy, perhaps, or governments collecting personal data on private citizens, or another federally mandated standardized test foisted on our children, or more locally, streets and roads slowly crumbling into asphalt dust — we always have one big controversy that can serve as a welcome diversion:
I attended a couple of diversionary discussions last month in Pagosa Springs, on the subject of Colorado water. The first discussion took place on November 17 at the Ross Aragon Community Center, in the South Conference Room, and was hosted by the Southwest Basin Roundtable.
The second meeting — related in a somewhat diversionary way — involved the elected board members of the Pagosa Area Water and Sanitation District (PAWSD) and resulted, after considerable discussion, in a closed-door executive session. More about that later… we’ll start with a summary of the Roundtable meeting .. which, interestingly enough, was attended by not a single member of the PAWSD board…
The November 17 meeting was sparsely attended — about 24 people, mostly members of various water boards or commissions — even though the subject matter may ultimately prove relatively momentous: namely, the impending Colorado Water Plan, and more specifically the portion of that plan known as the Southwest Basin Implementation Plan. We started the meeting by going around the room and introducing ourselves. I was struck by a comment from one of the non-governmental attendees.
“I’m Donna Formwalt, Pagosa Springs. We’re ranchers here. And I’m very interested in the water takeover by the Forest Service.”
The Colorado Water Plan is an initiative of Governor Hickenlooper’s office, begun as the result of an executive order issued in May 2013. A press release posted on the Governor’s website states:
Gov. John Hickenlooper today directed the Colorado Water Conservation Board (CWCB) to begin work on a draft Colorado Water Plan that will support agriculture in rural Colorado and align state policy to the state’s water values.
“Colorado deserves a plan for its water future use that aligns the state’s many and varied water efforts and streamlines the regulatory processes,” Hickenlooper said. “We started this effort more than two years ago and are pleased to see another major step forward. We look forward to continuing to tap Colorado’s collaborative and innovative spirit to address our water challenges.”
But as Ms. Formwalt hinted with her comment about the Forest Service, Colorado’s innovative and collaborative spirit will be challenged, in the coming months and years, by officials serving non-Colorado governments. The U.S. Forest Service, for one. And the governments of the “Lower Basin States” for another.
Are we preparing well enough for that conflict?
From the Colorado Water Plan website:
Colorado’s Water Plan will provide a path forward for providing Coloradans with the water we need while supporting healthy watersheds and the environment, robust recreation and tourism economies, vibrant and sustainable cities, and viable and productive agriculture.
Of course, no one — not even Governor Hickenlooper — can actually “provide Coloradans with the water we need.” Only Mother Nature can actually provide water, last I looked. But what the Governor and the Colorado Water Conservation Board mean to provide is a generally accepted plan for portioning out the limited water Mother Nature provides, in a state where supposedly conflicting interests want to preserve the status quo. History has taught us, you can preserve the status quo for only so long — and then people start fighting.
In the case of an ever-more-precious resource like water, the key battles might be between Rural Colorado and Urban Colorado, or they might be between this state where so many American rivers find their source — Colorado — and the several states where those rivers end up in water taps, a thousand miles away.
The Colorado Water Plan is, I assume, an attempt to keep both types of battles from getting too nasty.
The Southwest Basin — a geographic area defined by the Colorado Water Conservation Board — is located in the southwest corner of Colorado and covers an area of approximately 10,169 square miles. The largest cities are Durango (pop. 15,213) and Cortez (pop. 8,328). The region also includes three ski areas: Telluride, Wolf Creek, and Durango Mountain Resort.
A good deal of water flows through the Southwest Basin, and a good number of people want to get their hands on a share of it — including the people who will likely move into the region over the next 30 years or so. The Southwest Basin is projected to increase in municipal and industrial (M&I) water demand between 17,000 acre feet (AF) and 27,000 AF by 2050, according to Roundtable projections.
From the Roundtable web page:
Southwest Basin’s Major Projects and Programs
Dry Gulch Reservoir
Animas-La Plata Project
Long Hollow Reservoir
La Plata Archuleta Water District
It’s confounding, how that Dry Gulch Reservoir keeps showing up… like a bad penny.
More Colorado Water Plan coverage here. More Dry Gulch Reservoir coverage here.
In the regularly scheduled meeting of the San Juan Water Conservancy District (SJWCD) on Oct.14, board chairman Rod Proffitt discussed the progress and tour of the Dry Gulch Water Storage Facility (Dry Gulch Project), concerns of the Colorado Water Conservation Board (CWCB) and the appraisal value of the Running Iron Ranch.
In a letter of intent dated Sept. 10 between SJWCD and the Pagosa Area Water and Sanitation District (PAWSD), each party agreed to work toward finalizing a satisfactory agreement that both relieves PAWSD of its financial obligations to the Dry Gulch Project and acknowledges efforts by SJWCD to develop the Dry Gulch Project on a more practicable basis with a broader group of interested partners.
The letter of intent stated that an exchange of PAWSD equity in the ranch to the CWCB for substantial debt relief is to both parties’ mutual advantage.
The letter of intent also states that if the principal outstanding on the loan cannot be reduced by the amount equal to the appraisal value of the ranch or $4.6 million, whichever is more, PAWSD may seek other means to reduce its debt to the CWCB. The letter of intent further states that the annual interest rate may be reduced to no more than 1.75 percent and a full term for payment of 30 years.
SJWCD agreed to provide an appraisal of the ranch to the CWCB, which would establish the fair market value of the 660-acre ranch, shared water rights directly and indirectly related to the Dry Gulch Project, and long-term debt obligations to the CWCB incurred in the purchase of the ranch…
Proffitt went on to explain that the problems with comparables done on similar ranches which sold for more was the fact they had more buildings and structures in place, as well as more riverfront on the properties than those of the ranch that was appraised.
Proffitt told the board he had completed a tour of the Dry Gulch Project with CWCB Commissioner James Eklund, Jeff Robbins, legal council for PAWSD, and Kent Holsinger, legal council for SJWCD.
Eklund was impressed with the site, Proffitt explained…
Proffitt told the SJWCD board Tuesday evening that steps should be taken in order to satisfy the CWCB concerns that the board stayed focused on the Dry Gulch Project and did not wane.
“Due diligence is needed to keep the Dry Gulch Project moving forward. Hopefully, the courts will see we are exercising due diligence,” he said.
In an email, CWCB Deputy Director of Resource Management Tim Feehan stated other items CWCB would like to see as part of an agreement going forward: “SJWCD would retain an equitable interest in the Dry Gulch Project and its fee interest in the property. SJWCD would be able to move forward with land exchanges to further the Project.”
Other items for consideration mentioned in the email were that SJWCD would be provided with adequate funding to move the project forward and would take the lead in discussions with the Southern Ute Indian Tribe and other potential partners in the project.
The email went on to state that the CWCB would like to see SJWCD considered as manager/coordinator for the project once it is built and it also needs closure to be on the loan/grant agreement. The correspondence also pointed out a new operating agreement needs to include a forgiveness provision on the loan side of the existing agreement.
With the ushering in of a new Pagosa Area Water and Sanitation District (PAWSD) board, the Dry Gulch project and PAWSD’s relationship with the San Juan Water Conservancy District (SJWCD) are once again being defined.
Below is a recap of the current Dry Gulch situation as it relates to both PAWSD and SJWCD.
Rod Proffitt, president of the SJWCD board, was authorized to act of behalf of PAWSD in matters concerning Dry Gulch through May 5.
Proffitt emailed copies of a letter of intent and memorandum sent to PAWSD, regarding Dry Gulch, to The SUN.
In his April 28 memorandum, Proffitt stated, “Because my authority to act on behalf of PAWSD ends May 5th, everything that can be done has been done. For efforts to continue toward fruition, I will need the PAWSD board show its renewed confidence in the process through a vote to extend the existing resolution.”
Proffitt will present a Dry Gulch report to the PAWSD board during its June meeting and will seek agreement on different aspects of the project to continue moving forward.
The memorandum noted that progress has been made this year between the two districts, particularly during a Feb. 17 meeting out of which a letter of intent was prepared and sent to state officials regarding the future of Dry Gulch…
Several “principles of agreement,” dated April 4, were presented to both districts and the state. The proposals are still being discussed and none of the agreements have officially been adopted. The agreements are expected to be formalized on or before Sept. 2.
The SUN was provided with a copy of the April 4 agreements, which propose the following:
• The districts will request that the state forgive half of the $9.2 million loan taken out in 2007 by PAWSD. If the loan restructure is accepted, PAWSD would begin making payments Jan. 1, 2015.
• SJWCD would “exchange its ownership interest in the Ridge Parcel for the Park Ditch water rights associated with the Project …”
• PAWSD would “transfer all right, title and interest in and to the remainder of the Running Iron Ranch to SJWCD by Special Warranty Deed,” except the Ridge Parcel, outlined in a follow-up letter of intent by Proffitt.
• “SJWCD would agree to mortgage its fee simple ownership to the Running Iron Ranch to the State for the amount of $5 Million; said amount to be forgiven if the SJWCD begins work on the Property by December 31, 2024. If work does not commence by that time, SJWCD would agree to sell the property, sign it over to the State, or begin making payments on the outstanding balance at the option of SJWCD.”
• “SJWCD would agree to immediately assume all forthcoming costs and expenses associated with the Project, and will absolve PAWSD of any further or additional obligations under the agreement(s) terminated March 22, 2014.”
Agreements proposed also include protecting the future interests of both districts in purchasing and providing water, attracting different partners to replace PAWSD’s role in the project, and others…
The Colorado Water Conservation Board (CWCB) has been a major player in the Dry Gulch discussions.
According to Proffitt, the CWCB “financed property needed for the development of Dry Gulch to this point … [and] is critical to resolving how PAWSD exits this project and SJWCD moves Dry Gulch forward.”
In an email sent to state officials April 24, Proffitt wrote, “The State has not decided definitively Dry Gulch is a project they want to get behind and support by making it possible for PAWSD to get out of the project without making it impossible for SJWCD to move the project forward.”
Originally, it was believed that CWCB would discuss taking on the project during a closed session in May and then during a public session in July. However, as of May 13, the CWCB has delayed putting Dry Gulch on the agenda. The public meeting will now likely not take place until September.
Proffitt informed The SUN that a meeting with the CWCB is scheduled for June 3 to further refine the Dry Gulch project proposal. Updates on the project will continue to be made available as they occur.
Commissioner John Ranson expressed that, while he was disappointed that the time and effort given to the MoU did not pay off, he believes the withdrawal of the agreement was the right move. “I think it’s exactly the right thing they should have done,” Bunch said in a Wednesday interview. “It gets things back on the basis it should have been on since day one … We are two separate managerial agencies that need to take care of our business.”
A rift between the BoCC and PAWSD began in the fall of 2009, when the BoCC began requesting financial documents from PAWSD, expressing concerns over PAWSD’s spending, Dry Gulch Reservoir assumptions, service plan and more. The rift then deepened last March, when the BoCC began requesting that PAWSD provide the county with an annual report.
The two boards met in a public meeting in March 2010, where the idea of an agreement or memorandum of understanding between the two boards was mentioned by PAWSD Attorney Jim Collins.
The local chapter of TU brought forth litigation in 2004 over concerns that the then 35,000 acre-foot reservoir and accompanying rights for diversion and refill amounted to a water grab on the part of PAWSD. Six years later, the [Pagosa Area Water and Sanitation District] and SJWCD[San Juan Water Conservancy District] boards voted to allow their lawyer, Evan Ela, of the Denver law firm Collins Cockrel & Cole, to prepare a final decree to be submitted to and approved by District Court Judge Greg Lyman, hopefully closing the case.
The two boards made the decision following an executive session with Ela and water engineer Steve Harris at a joint meeting held on Dec. 1. Following the executive session, the boards made the decision and voted to release a letter between Ela, Sen. Bruce Whitehead and Trout Unlimited’s attorney, Andrew Peternell, which outlines the terms of the agreement…
Though litigation with Trout Unlimited should soon cease, it is still unclear whether or not Dry Gulch Reservoir will be built, when or by whom.
Here’s Part Three of Bill Hudson’s series titled Dry Gulch gets a little drier running in the Pagosa Daily Post. From the article:
The number that will stick in people’s minds, no doubt, is 11,000. That’s the maximum number of acre-feet allowed to be stored in a future Dry Gulch Reservoir, under this agreement — when combining an existing 6,300 acre-foot SJWCD storage right with a new 4,700 acre-foot storage right.
Here’s Part Two of Bill Hudson’s series Dry Gulch gets a Little Dryer running in the Pagosa Daily Post. From the article:
As I say, writing about PAWSD has been an education. The provision of simple, clean drinking water, one of the very few substances absolutely necessary to human life, is not rocket science — after all, we are surrounded by water flowing freely in rivers and streams, and we have numerous underground aquifers accessible by wells. But in political terms, the provision of water is one of the more complicated processes in our governmental system. The right to use water — the water available all around us — is strictly regulated in Colorado, as it is throughout the U.S…
The mountains to the north and east of Pagosa Springs normally collect 300-400 inches of snow during the winter months, and in springtime, the water from the snowmelt slowly enters our local rivers and streams. By June, a massive amount of water is passing through Archuleta County — enough water to supply literally millions of human beings. But the water does not “belong” to the residents of our little community; through a complicated set of legal agreements and court rulings, the water passing through Pagosa Springs every year “belongs” mostly to people living downstream, in Arizona, California, Utah and Nevada.
The agreement, coming after an hours-long negotiation moderated by Sen. Bruce Whitehead, D-Hesperus, effectively ends years of dispute between the districts and the environmental group. “There was a willingness, I think, and a desire for both parties to come together,” Steve Hartvigsen, director of the Pagosa Area Water and Sanitation District, said Saturday.
Though the districts originally requested water rights for 35,000 acre-feet, the agreement gives them the necessary water rights to construct a reservoir no larger than 11,000 acre-feet. In return, Trout Unlimited agreed to drop its opposition to the districts’ water rights request. The next step in the process is to put the terms of the agreement in writing and, once the draft is agreed upon by all parties, it will go to the water division for approval by the division engineer before going to the district water court for final approval…
Both Hartvigsen and [Trout Unlimited attorney Drew] Peternell acknowledged Whitehead’s integral role in bringing the parties together and ultimately as moderator of the negotiations. “A big thanks to Sen. Whitehead,” Hartvigsen said. “Without him there, I can’t say that we would have come to an agreement, not that we didn’t want to.”
According to the meeting agenda, the hired facilitator, Maro Zagoras, of Desired Outcomes Inc. (Fort Collins), was to initiate discussions on her specific role, hopeful meeting outcomes, the day’s agenda and equally important, determining a group name and establishing immediate and future ground rules. That was to begin at precisely 4:30 p.m. First, however, Zagoras chose to “train” or educate the panel on proper conduct and procedures necessary in reaching vital decisions relevant to the group’s final charge, which the group itself must ultimately define.
Though the CWSPG has yet to clearly define its true aim — much less name itself, or designate an official group spokesperson — determining the best means of managing PAWSD finances has never been considered its ultimate goal by the 29 additional participants now seated on the panel. Rather, answering whether PAWSD should plan for future water needs and, if so, how, are apparently the questions that drew most volunteers to sit on the CWSPG panel to begin with. Certainly, any future water storage plans will involve detailed financing, in which informed district constituents should play a vital role. However, PAWSD is a complex special district funded by several convoluted enterprise funds, the management of which can’t be taken lightly.
In light of recent community unrest regarding future water planning and storage issues, the Pagosa Area Water and Sanitation District (PAWSD) Board of Directors asked that willing citizens step forward and assist in determining how best to assure long-term water supplies. By the June 9 meeting, 21 participants signed on, including local government officials, builders, Realtors, water experts and rate payers.
Toward the end of another lengthy Pagosa Area Water and Sanitation District (PAWSD) Board of Directors meeting Tuesday night, some convincing community members moved what seemed an immovable object. As a result, the board suspended its construction-related Water Resource Fee (WRF) for six months.
Here’s Part I of Bill Hudson’s series PAWSD Makes an Apology, Of Sorts. From the article:
Last night, the Pagosa Area Water and Sanitation District board and staff made a lengthy presentation for the benefit of the Archuleta Board of County Commissioners. The meeting had been requested by the BoCC, and was destined, I think, to set Archuleta County on a new path. Either the BoCC and PAWSD would enter into a dialog about the proposed Dry Gulch Reservoir and begin to work collaboratively in deciding the future of the county — or the BoCC would begin to exercise its statutory oversight powers, and start intervening in the water district’s financial decisions.
On May 4, the residents and property owners within the PAWSD district went to the polls and elected two new board members, in a landslide election: Allan Bunch, owner of the Malt Shoppe restaurant, and Roy Vega, owner of Vega Insurance. Bunch and Vega ran on a platform that questioned current PAWSD policies — particularly the proposed Dry Gulch Reservoir and its funding mechanisms, along with the high level of debt the district has incurred in recent years.
The San Juan Water Conservancy District (SJWCD) and Pagosa Area Water and Sanitation District (PAWSD) boards of directors met in joint session Monday afternoon, with talks centering around acquiring rights to flood land owned by the Laverty family two miles northeast of Pagosa Springs. While uncertainty appeared paramount throughout the discussion, both boards and their attending legal counsel appeared intent on assisting the Lavertys in creating two separate conservation easements on their property, with hope of eventually acquiring fee title ownership of the inundated portion…
By agreeing to conservation easements on Laverty land, Whiting said the districts will also gain the right to store water up to the 7,400-foot contour line — a level that would constitute a reservoir of 35,300 acre feet. Though few people envision the need for an impoundment of that size in the foreseeable future, the districts feel it prudent to plan for the maximum allowed by court decree.
Problem is, the original court decree, which initially granted the districts sufficient water rights to develop a 35,300-acre-foot lake, has been appealed by Trout Unlimited multiple times. While both sides await yet another decision by Judge Gregory G. Lyman of District Court, Water Division 7, State of Colorado, the court has already reduced district water rights to allow a reservoir of just 25,300 acre feet, including 6,300 acre feet currently held by the SJWCD. Nevertheless, as previously guided by former SJWCD board president Fred Schmidt, the districts believe they must secure a site adequate for expansion, should future growth dictate a need for additional water storage. To do so, according to Whiting, the districts’ only two options have always been to either grab the Laverty land through eminent domain, or agree to conservation easements that will prohibit any future development, other than the reservoir…
On Tuesday, [Southwest Land Alliance (SLA) Executive Director Michael Whiting] insisted easements will give the districts what they need, while avoiding higher costs and the pubic relations nightmares associated with taking land through eminent domain. Given two separate easements, they could eventually flood the portion up to the 7,400 contour line, while resting assured the land above 7,400 feet would not bring residential or commercial development along the Dry Gulch shoreline…
At Monday’s meeting, however, districts’ attorney Evan Ela expressed concern with what he envisioned as their agreeing to a “partner in their lake.” While referring to the SLA, who will hold, maintain and enforce the easements in perpetuity, he feared an SLA board 20 or 30 years down the road that could interpret the agreement terms differently. Further, he suggested the districts try and find some way of eventually “purchasing” the easement on the inundated portion from the SLA. With that, they could eventually gain fee title ownership.
But, Whiting insists that’s not possible. “Only a land trust can hold whatever easements are created,” he said. “The Lavertys selected the Southwest Land Alliance to do these easements. They could’ve used another land trust, but we’re the only game in town. “The districts are a developer,” he continued. “No developers can ever hold an easement that encumbers a property that they themselves would develop, it’s illegal. Water districts can hold easements, but not on property they will develop, and Dry Gulch will be a development of that land.” That said, it appears the only real option the districts have in eventually developing Dry Gulch to the fullest extent possible is to agree to the conservation easements as proposed.
Meanwhile here’s Part VII of Bill Hudson’s series PAWSD Gets Called on the Carpet which is running in the Pagosa Daily Post. From the article:
As we will see in today’s article, the numbers that PAWSD shows us — or that it shows to lenders like the Colorado Water Conservation Board — are never complete numbers, nor are they always “up to date” numbers. PAWSD has at hand numerous reports and studies, dating from various years, and is able to select projections and water usage data as needed from those various reports.
Our readers may have noticed in yesterday’s article that the Pagosa Area Water and Sanitation District put the district’s taxpayers another $11 million in debt by submitting a 2008 loan application to the CWCB — and then used most of that money to pay off a previous loan they’d already used to purchase land for their proposed Dry Gulch Reservoir, to be built, PAWSD says, some time in the next 50 years.
Here’s Part I of Bill Hudson’s series PAWSD Gets Called on the Carpet running in (Pagosa Daily Post) report from last week’s meeting. From the article:
As a few of us discovered for the first time yesterday — sitting in the audience in the Commissioners meeting room at 10am — the County Commissioners have the power to request an “annual report” from any special district located all or partly within their county.
And that is what the Board of County Commissioners want from PAWSD, according to the letter (pdf) approved yesterday. Give us an annual report, the BoCC asked, that will clarify your financial condition and your long range plans. Especially, give us some justification for the planned 35,000 acre-foot Dry Gulch Reservoir, and the related impact fees.
Here’s Part II of Bill Hudson’s series PAWSD Gets Called on the Carpet running in the Pagosa Daily Post. From the article:
The Pagosa Area Water and Sanitation District has found itself in the position of such a forward-thinking parent in the past few years — assuring us, the residents of Archuleta County, that if we would just pony up and swallow their $360 million, 35,000 acre-foot reservoir and water treatment project at Dry Gulch, our great grandchildren will someday have plenty of water.
At Tuesday’s PAWSD board meeting, board member Bob Huff referred to Dry Gulch critics as folks who “want to kick the can down the road” — meaning, they want to put off the hard decisions, and the immediate costs of a well-considered plan for the future. “We, as a board, have decided, we’re not kicking the can down the road. We’re going to start planning; we’re going to start moving on that plan. And that’s what the Dry Gulch [property purchase] is all about. We’re moving forward in a step-by-step way…
The most vocal of PAWSD’s critics include, of course, the Pagosa Area Association of Realtors and many of our local developers and builders who see the water district’s Water Resource Fee impact fees and Capital Investment Fees and Inclusion Fees — running $30,000 or more for a large, new home in Pagosa Springs — as part of the reason behind the slow demise of the Archuleta County construction industry, beginning in about 2006 when those new fees were established by PAWSD.
Here’s Part III where Hudson steps through the commissioner’s letter.
A special meeting of the Board of Directors of the Pagosa Area Water and Sanitation District has been scheduled for 9:15 a.m. Monday, Feb. 8. The primary purpose of this meeting is for discussions with the Board of Directors of the San Juan Water Conservancy District on water matters and the development of raw water projects. Towards the end of the meeting, the boards of directors are expected to enter into executive session for the purposes of conferences with legal counsel for receiving legal advice on litigation and discussing matters related to land acquisition for development of raw water facilities and other matters subject to negotiation involving both districts pursuant to Sections 24-6-402(4)(a), 24-6-402(4)(b), and 24-6-402(4)(e), C.R.S. The meeting will be held at the district’s administrative office located at 100 Lyn Ave.
…the district has said it will continue working with the Pagosa Area Water and Sanitation District (PAWSD) to obtain additional land for a future reservoir, the exact size of which will be determined sometime in the future. It will also participate in the final phase of the Lower Blanco River Restoration Project in 2010, as it has throughout the first three phases. Once complete, the project will afford improved water quality, fishing and public access to several miles of mountain stream.
The bulk of the district’s anticipated 2010 income is based on property tax revenues subject to statutory limitation of $102,648. Calculated by a certified mill levy of 0.316 mills, it is based on a countywide assessed property valuation of $324,836,502, excluding bond and interest payments, and election-approved contractual obligations. On the budget’s revenue side, the district expects $50,000 in grants (Environmental Protection Agency and Southwest Water Conservation District); the $102,648 in mill levy money; $7,500 in specific ownership tax; $2,700 in delinquent tax and interest; and another $6,000 in interest earned. The total should equal $169,348, or some $63,000 more than last year. As for expenses, the proposed Dry Gulch Reservoir project will account for the lion’s share, with $162,050 going to land acquisition and water rights. The Blanco River restoration project will receive $5,000 in district support; while other ditches and streams, cloud seeding and various contributions will total another $3,500. Assorted administrative and legal expenses will add up to $49,400, as public relations, education, and treasurer’s fees will cost $5,600. Total expenses should be $225,550. In 2010, the district expects expenses to exceed those of 2009 by approximately $33,400. As the new year begins, its budgetary fund balance will amount to $220,279, while its year-end budgetary fund balance should equal $164,077. The 2010 beginning balance will be roughly $86,000 less than last year’s, while the ending balance will fall short of last year’s by about $56,000.
In its petition, Trout Unlimited requests the Supreme Court to remove from its November 2 opinion its endorsement of a one-year safety supply reserve, stating that, “the Districts would add a volume of water equivalent to a one-year’s demand to the amount of storage they would otherwise require, essentially doubling the size of the reservoir.” Trout Unlimited also alleges in its petition that planning for a one-year storage reserve constitutes speculation.
A one-year safety supply is, by definition, enough storage to supply one year of demand in the situation that a drought or another catastrophic event prevents PAWSD from diverting water from its stream sources. For example, in the summer and fall of 2002, even with sand bagging, a very minimal amount of river water was available for diversion. Because there had been no runoff in the spring of 2002, reservoirs were dangerously low. Even with severe drought restrictions, the District was very close to “running dry.” In 2002, the District had no storage safety margin. Currently, the safety margin is provided by the recently completed Stevens Reservoir Enlargement. For the first half of the 2002 drought year, sufficient river water was available for diversion. Reliance on storage became necessary in late June. The Trout Unlimited claim that a one-year safety supply doubles the size of the reservoir is an erroneous statement, as some of the first year demand would be served through river diversions and some of the storage reserve would be supplied by existing District reservoirs. Future drought patterns cannot be predicted with certainty, and the District has implemented its one-year safety supply margin to prudently plan for that uncertainty. The water districts feel that planning for severe drought is not speculative given the long historical record of, and recent occurrence of, severe droughts in the southwestern United States.
The response of the Supreme Court to the Petition is anticipated to be forthcoming in the next month. Meanwhile, the Districts will hold a special joint meeting at 6:00 p.m. November 30, at the PAWSD offices to discuss the case and the necessary next steps to preparing for another trial with the District 7 Water Court.
Here’s the release from the Pagosa Area Water and Sanitation District.
According to Drew Peternell, of Colorado Trout Unlimited’s Western Water Project, the Supreme Court laid out a new test for public utilities. In the Pagosa Springs case, the court ruled that the city’s claim for water based on a 100-year planning horizon was not reasonable. “They have to show that claim for water is based on realistic projections for population growth. They can’t just pull numbers out the air,” Peternell said.
Undeveloped (conditional is the legal term) water rights are subject to periodic hearings in water court. Every six years, the water providers have to show their claim on the water is still valid. When the time for those hearings comes, they will be held to the new standards spelled out by the court, Peternell said.
Denver Water, the biggest player in Summit County, joined in the court case on the side of Pagosa Springs, along with other water providers from around the state. “We wanted the court to maintain a degree of deference to governmental entities that have to plan for future growth,” said Denver Water attorney Casey Funk. Funk said the Supreme Court decision established some new factors that water courts have to consider before awarding water rights, but that water providers still do have some flexibility in planning for future needs. Essentially, the ruling partly clarified some of the conflicts between the “great and growing cities” doctrine, which provides flexibility to plan for future water needs, and the anti-speculation doctrine, which limits pie-in-the-sky water claims.
In this most recent ruling, the high court upheld the districts’ 50-year planning horizon decreed by Judge Gregory G. Lyman of District Court, Water Division 7 in a September 2008 ruling, and endorsed the districts’ planning approach to maintain a one-year water safety supply margin in its storage reservoirs. For a second time, however, the Supreme Court also remanded the case back to the District 7 Water Court for additional evidence regarding specified decree provisions and determination of “water amounts reasonably necessary to serve the districts’ reasonably anticipated needs in the 2055 period, above its current water supply.”[…]
In a press release issued Tuesday, a districts representative stated, “In its opinion, the Supreme Court endorsed statewide water rights planning efforts recently coordinated by the Colorado Water Conservation Board. The Supreme Court opinion also linked land use planning requirements recently enacted by the Colorado General Assembly to water court determinations of conditional water rights. In doing so, the Court introduced unprecedented legal elements into future water court determinations. “Additional trial before the Water Court will enable the Districts to extend their evidence of long-term growth patterns within Archuleta County in support of their 50-year water rights planning horizon and to demonstrate the actual reliability of water rights upon which the Districts currently depend.”[…]
From TU’s point of view, however, the Supreme Court decision reinforced the principle that Colorado municipalities must base water projects on clearly demonstrated and credible projections of future need. “The Supreme Court reaffirmed today that it will not tolerate public utilities speculating in water,” said Drew Peternell, director of TU’s Colorado Water Project, who argued the case before the state’s highest court. “This is a victory for reality-based water planning.”[…]
In its most recent appeal, TU argued that the districts’ revised figures were still not in line with credible future water use projections and amounted to speculation. In Monday’s decision, the high court unanimously agreed, finding insufficient evidence to support the quantities of water Lyman awarded, either in direct flow rights or storage. In its decree, the Supreme Court ruled that the 23,500-acre-foot size approved by the water court is based on “speculative claims, at least in part.” In response, TU insists that, “Unless the Pagosa districts can now demonstrate a ‘substantial probability’ that a reservoir of that size is needed to meet future needs, the water court must reduce the amount of their claimed water.”
Meanwhile, the Pagosa Area Water and Sanitation District board approved a change in the diversion plan for Dry Gulch Reservoir recently. Here’s a report from Chuck McQuire writing for The Pagosa Springs Sun. From the article:
According to engineers, the modified plan will reduce water treatment costs while meeting current and short-term future demands, preserve senior West Fork water rights and allow incremental system development as needed…
As designed, Option 6A involves reconstruction of the Snowball pipeline from the West Fork diversion to a proposed treatment plant at Dry Gulch. Until development of the Dry Gulch plant is necessary, the Snowball treatment plant will be upgraded and expanded, while a segment of the Snowball pipeline (leading to the Snowball plant) is maintained. As the Dry Gulch plant is eventually built, workers will connect both plants with a new pipeline, and construct the pipeline from Dry Gulch to the cemetery tank. Meanwhile, as engineers further scrutinized the original options, they also realized that the quality of water coming from the West Fork was notably superior to that found in the main stem of the San Juan. By continuing to utilize West Fork water, PAWSD could reduce projected water purification costs, while maintaining stringent water quality requirements. Also, because the elevation of the West Fork diversion is hundreds of feet higher than the proposed Dry Gulch treatment plant, it will naturally pressurize the plant, thereby reducing the cost of building and operating expensive pumps. Too, building a new diversion at the Dry Gulch site would require transfer of the Snowball water rights from the West Fork to the main stem, through a Colorado Water Conservation Board in-stream flow water right. Based on discussions with the CWCB, doing so would likely result in subordinating the Snowball rights to the CWCB right, thus removing them from priority much of the year. The end result would be a less-than-firm water supply for District Two. According to PAWSD, Option 6A will allow system development in stages, as funding and demand dictates. An upgraded Snowball treatment plant and a newly-aligned Snowball pipeline segment around the Jackson Mountain slide area would come first, with an upgraded stretch between the slide area and the West Fork diversion next. Eventually, as the Dry Gulch treatment plant is built, an extended line would connect it and the Snowball treatment plant.
Here’s the release from Colorado Trout Unlimited (Randy Scholfield):
Colorado Supreme Court hands down anti-speculation water ruling
Trout Unlimited hails decision as a “victory for reality-based water planning”
(Denver)—The Colorado Supreme Court today handed down a decision that reinforced the principle that Colorado municipalities must base water projects on clearly demonstrated and credible projections of future need.
In the case, Pagosa Area Water and Sanitation District and San Juan Water Conservancy District v. Trout Unlimited, the Court ruled that Pagosa area water districts had not sufficiently demonstrated a need for the amount of water they claimed for the proposed Dry Gulch Reservoir, based on projected population growth and water availability over a 50-year planning period.
“The Supreme Court reaffirmed today that it will not tolerate public utilities speculating in water,” said Drew Peternell, director of TU’s Colorado Water Project, who argued the case before the state’s highest court. “This is a victory for reality-based water planning.”
The ruling is the second time Trout Unlimited has challenged the district water court’s decrees in the so-called Dry Gulch case—and the second time it has won.
In 2006, TU challenged a decision by Judge Gregory G. Lyman, the District Court judge who serves as the water judge in Division 7 in Colorado’s southwest. The decision would have allowed a reservoir of 35,300 acre feet two miles northeast of Pagosa Springs, using diversions from the San Juan River totaling 180 cubic feet per second.
Trout Unlimited appealed that decision to the Colorado Supreme Court, which in 2007 reversed Judge Lyman’s findings and remanded the case back to him for reevaluation of the districts’ future water needs.
Without examining new evidence, as the Court had suggested would be necessary, Judge Lyman issued another decree in 2008, awarding the Pagosa Springs districts enough water to build a Dry Gulch Reservoir of 25,300 acre feet in size, using diversions from the San Juan River totaling 150 cfs.
Trout Unlimited appealed again, arguing that the revised figures still weren’t in line with credible future water use projections and amounted to speculation.
Today, the Colorado Supreme Court unanimously agreed with TU. While the Court did allow a 50-year planning horizon (TU had argued that a 40-year timeframe was reasonable), the Court found that there wasn’t evidence to support the quantities of water the judge had awarded, either in terms of the direct flow rights or in terms of storage.
The 23,500 acre feet size approved by the water court for the Dry Gulch Reservoir is based on “speculative claims, at least in part,” said the Court. Unless the Pagosa districts can now demonstrate a “substantial probability” that a reservoir of that size is needed to meet future needs, the water court must reduce the amount of their claimed water.
“The ruling underscored that municipalities can’t justify a new water right without real evidence to support it,” said Melinda Kassen, director of TU’s Western Water Project. “This protects Coloradoans from irresponsible water grabs and speculative development.”
Colorado law already has rules preventing speculation in water rights. Although there is an exception in some situations for municipalities, the Supreme Court today made clear that the public exception should be interpreted narrowly.
Looking ahead, TU called this latest ruling an opportunity for all water stakeholders to sit down and craft comprehensive solutions for meeting the region’s real water needs.
“We’re ready to talk with the Pagosa Springs stakeholders and craft a solution that meets a range of valid needs, including municipal growth, agriculture and recreation and wildlife,” said Peternell. “But any solution has to be based on credible, substantiated numbers about future water supply and needs.”
Effective May 12, a long-standing ranching family and two area water districts entered into an agreement with a local land trust to explore the feasibility of conservation easements on some or all of approximately 140 acres located nearly two miles northeast of Pagosa Springs. As Dry Gulch is now planned, a portion of the acreage will eventually lie beneath the waterline, while the remainder will become lakefront property.
The land in question is part of several hundred acres currently owned by the Laverty family, including Kitzel Farrah, Kurt Laverty and Steve Laverty. Entities hoping to acquire that portion of the Laverty property include the San Juan Water Conservancy District (SJWCD) and the Pagosa Area Water and Sanitation District (PAWSD), herein referred to as “the districts.”
Though the Lavertys have been reluctant to sell property to accommodate the reservoir, they are apparently willing to part with that which will ultimately be flooded, while preferably maintaining ownership of the rest. They are also reportedly inclined to donate certain property rights to the public (in the form of conservation easements), in order to preserve and protect the shoreline, view shed and water quality.
Of course, filling Dry Gulch may be possible without the Lavertys having to sell any land at all. According to Southwest Land Alliance (SLA) Executive Director Michael Whiting, many reservoirs exist over land permanently protected by more restrictive easements. Depending on the answers to a number of relative questions, the Lavertys might end up selling the districts all or a portion of the land, or simply holding on to it, while implementing multiple easements.
To answer questions and eliminate all doubt, the Lavertys, SLA and the districts agreed to investigate whether some combination of conservation easements and/or fee title acquisition would satisfy the districts needs, while also benefiting the Lavertys and the community overall.
Here’s an update on the Pagosa Water and Sanitation District’s proposed Dry Gulch Reservoir, from Chuck McGuire writing for the Pagosa Sun. From the article:
New numbers are in, the reservoir is shrinking and a related, controversial fee will likely decrease. Nevertheless, revised cost estimates of the entire Dry Gulch project have risen dramatically. A crowd gathered at the Vista Clubhouse Monday evening, as engineering, financial and legal consultants joined two local water districts in presenting an updated public overview of area growth projections, water demand and storage needs. The two-hour program centered on the proposed Dry Gulch Reservoir, to be located two miles northeast of Pagosa Springs…
The latest estimate considers a smaller reservoir, of just 19,000 acre feet — plus all related infrastructure — as well as a new treatment plant and transmission pipelines that will provide potable water service to meet increased demand resulting from growth. Though the comparison is hardly apples to apples, the fully-developed cost through the life of the project now appears to be $356.5 million, or more than double the previous estimate. However, the cost of the raw water component and related infrastructure alone — as was estimated before — would now run $216.5 million, or $66.5 million more than originally thought. The difference is largely attributable to a vastly more detailed analysis and calculations in 2008 dollars. Of course, the price of the treatment plant and transmission pipelines must also be included in plan projections, and is now estimated at $140 million…
A few years ago, the districts and community taxpayers decided new growth should pay for additional raw water storage and all related infrastructure. Therefore, PAWSD created a Water Resource Fee (WRF) component as part of its Capital Investment Fee (CIF), to help offset the cost of Dry Gulch. The CIF, meanwhile, generates revenue to pay for added treatment and delivery of water to new users throughout the PAWSD district. Both fees are assessed against new development. The amount of money each fee will generate through the life of the Dry Gulch project depends on the actual rate of growth the community sees. But at Monday’s presentation, PAWSD staff and consultants predicted the increase in Equivalent Units (EUs) — a widely accepted measure of water demand — would average 3.9 percent through the year 2055. If so, a WRF of $5,617 per EU, at 36,413 new EUs, would bring in nearly $205 million, while a CIF of $3,579 for the same number of EUs would draw more than $130 million. The total, then, would cover all but approximately $21 million of the entire project.
Here are Part One and Part Three (I couldn’t find a link for Part Two) of Bill Hudson’s series PAWSD Conjures $357 Million Project in Dry Gulch running in the Pagosa Daily Post.
From the Pagosa Daily Post (Sheila Berger): “The Pagosa Area Water and Sanitation District and San Juan Water Conservancy District will host a public presentation of the Dry Gulch Project on Monday, February 23 from 6 to 8 pm at the Pagosa Lakes Vista Clubhouse. The presentation will cover all aspects of the project, including revised future growth and water demand projections, project infrastructure, planned reservoir size, project financing and Capital Investment Fees and plans for reservoir public use. A question and answer session will follow the formal presentation.”