Durango: “Solving the Water Funding Puzzle” conference recap

Animas River through Durango August 9, 2015, after the Gold King Mine spill. Photo credit Grace Hood

From The Cortez Journal (Jim Mimiaga):

The Southwestern Water Conservation District hosted a conference titled “Solving the Water Funding Puzzle” at the DoubleTree Hotel in Durango to confront the budget crisis.

Colorado’s overriding challenge lies in how water management is funded, said Bill Levine, budget director for the state Department of Natural Resources.

Much of the state’s revenue stream for water-supply management is tied to federal energy, including severance taxes from the oil and gas industry, which exposes Colorado to the ebb and flow of the volatile oil and gas industry.

“When energy values drop, so does the revenue stream, so it is by nature volatile,” Levine said. “Revenue that is not tied to the energy industry is needed.”

Because of a weak energy market and a costly court ruling, the state’s revenues from severance taxes dropped from $271 million in fiscal year 2015 to $67 million in fiscal year 2016.

And in 2016, the state lost a lawsuit brought by British Petroleum over severance taxes. The state is refunding energy companies – $113 million so far – after the Colorado Supreme Court ruled that the companies qualify for a deduction the Department of Revenue had been denying them.

State and local agencies have paid a price.

The drop in revenues from federal minerals caused program budgets for the Colorado Water Conservation Board to drop from $14 million in 2015 to $8 million in 2016.

The cuts wiped out funding for boat inspection programs needed to stop invasive quagga and zebra mussels, which has limited boating at McPhee Reservoir and Totten Lake in Montezuma County.

Grant programs of the Department of Local Affairs also were cut, because they too depend on severance tax revenues.

Severance tax revenues have funded the Southwest Basin Roundtable grant program that supports water projects in southwest Colorado. Funding will suffer, and there will be less grant money, said roundtable chair Mike Preston.

In La Plata County, the basin fund helped to finance an inlet from Lake Nighthorse as part of a plan to provide municipal water for Fort Lewis Mesa, which includes the communities of Breen and Kline.

It’s been tapped to support a project improving water supply at Lake Durango, which serves Durango West communities. And the grants have supported an Animas River community forum, which is establishing emergency response protocols to protect water users in the event of a toxic spill such as the 2015 Gold King Mine disaster.

Finding funding solutions
Several potential sources of revenue for water-related infrastructure and programs were presented at the packed conference.

Emily Brumit, of the Colorado Water Congress, gave an update on legislative proposals and a ballot initiative that would support water-related budgets, including the struggling boat-inspection programs.

For example, Senate Bill 259 proposes to replace lost severance tax revenues with $10 million from the general fund to support forest restoration, species conservation and boat inspection programs. House Bill 1321, introduced this week, would create a revenue stream through a sticker fee to fund boat inspection programs.

And Initiative 20 focuses on oil and gas severance taxes. Its primary goal is to increase the severance tax rate, eliminate the severance tax credit that is based on property taxes, eliminate the stripper well exemption and require that a portion of severance tax revenue be paid for specific purposes…

Legislators are considering asking voters to approve a container tax on beverages to raise $100 million to $200 million per year for water-related needs. A vote could end-run the Taxpayers Bill of Rights, exempting it from TABOR revenue caps.

Other ideas presented at the conference included a new water fee paid by residential consumers, new water tap fees and new tourism fees…

Government specialist Christine Arbogast said the idea of private-public partnerships is popular for new money. But she does not believe they are a viable local solution locally.

“The expected rate of return of 5-8 percent from private investors is too much for the tax base of smaller communities,” she said.

La Plata County Commissioner Brad Blake urged the crowd to take a long-term vision on solving the budget crisis, like previous generations did.

“We have good water rights, but don’t have a way to move it around well,” he said. “The pioneers built dams, ditches and levees. Now we are tasked with looking ahead to provide water infrastructure in our area. We need more public involvement so we get all the help we need to overcome this monumental task.”

Pueblo West contracts for 6,000 acre-feet of storage in Lake Pueblo

Pueblo West
Pueblo West

From The Pueblo West View (Kristen M. White):

Pueblo West will have the right to store water in Pueblo Reservoir in the future, should the storage be needed, after the Metropolitan District agreed to enter into a subcontract with the Southeastern Colorado Water Conservancy District…

The master plan contract is between the Bureau of Reclamation and the water district, and Pueblo West now has a subcontract with water district for its storage rights.

The contract allows Pueblo West to begin paying for 10 acre feet, at the starting rate of $40.04 per acre foot of water, in 2017. But the contract gives Pueblo West the ability to store as much as 6,000 acre feet of water in the future should the storage ability be necessary.

Pueblo Dam hydropower plant should be online next year

Pueblo dam releases
Pueblo dam releases

From KOAA.com (Andy Koen):

The Pueblo Dam will soon be producing enough renewable energy to power 3,000 homes. The Southeastern Colorado Water Conservancy District plans to begin construction of the $19.5 million hydroelectric generating station later this year. The construction site will be located downstream form the Pueblo Dam River Outlet which was constructed to serve as the connection for the Colorado Springs Utilities Southern Delivery System.

“We’ll be using the water that’s flowing into the river again, we won’t be consuming any of that water,” explained Conservancy District spokesman Chris Woodka.

The District borrowed $17 million from the Colorado Water Conservation Board to build the plant. It will house a trio of turbines, each capable of producing electricity whether the river is moving fast or slow.

“We designed it so that it would at several different flows so that we could get the maximum production out of it,” Woodka said.

With a rating of 7.5 megawatts, the plant will create enough power for roughly 3,000 homes. It’s the kind of clean power that City leaders in Pueblo want for their community…

The Conservancy District expects to generate around $1.4 million annually from the sale of it’s electricity. Groundbreaking is expected to take place in May and Woodka said their goal is to have the power plant go online in the Spring of 2018.

Year-end precipitation levels near average — The Pueblo Chieftain

Below is the westwide basin-filled map from December 28, 2016. NRCS maps have not been updating over the holiday weekend.

Westwide SNOTEL December 28, 2016 via the NRCS.
Westwide SNOTEL December 28, 2016 via the NRCS.

From The Pueblo Chieftain (Jon Pompia):

As 2016 draws to a close, the yearlong precipitation level is lower than in 2015 but not far off from the average annual precipitation.

Through Friday, 2016’s precipitation level was 11.91 inches, down when compared to 2015’s mark of 16.66 inches. When compared to the average annual precipitation of 12.55 inches, however, this year’s moisture level is only slightly lower.

According to the U.S. Geological Survey water supply website, Fountain Creek and the Arkansas River are currently above average; flows were mostly above average throughout the year.

From a standpoint of moisture content in the state’s snowpack, recent holiday weather fronts proved to be a welcome gift. The fronts deposited enough snow in the mountains to put the state over the average for the year in terms of moisture content.

As of Friday, the Arkansas basin’s moisture content was at 115 percent of average, and the Rio Grande basin was at 106 percent of average.

The National Weather Service’s three-month temperature outlook indicates that Pueblo will be above average, with an equal chance of conditions being wet or dry through that timespan.

Chris Woodka of the Southeastern Colorado Water Conservancy District points out that, “We imported 59,214 acre-feet of water this year (2016) from the Fryingpan River watershed, which was just slightly above the average of 55,907 acre-feet for the Fry-Ark Project.

“It was a good year, because we were able to provide 45,000 acre-feet of supplemental water for municipal, domestic and agricultural use in the Arkansas River basin,” he said.

Statistics provided by the Board of Water Works indicate that city water consumption was higher in 2016 than the previous year: 7,900,914 gallons to 7,511,255, but under the five-year average of 8,104,317.

As far as pumpage, the water that is treated and then sent out from the plant, 8,481,644 gallons were pumped, an increase over 2015’s 7,924,727 but below the five-year average of 8,614,500.

Meanwhile Denver was drier over the past year:

screen-shot-2017-01-03-at-5-28-21-am

Pueblo Reservoir: Reclamation awards master storage contract to Southeastern District

Pueblo dam releases
Pueblo dam releases

Here’s the release from the Southeastern Colorado Water Conservancy District (Chris Woodka):

The Southeastern Colorado Water Conservancy District has signed an Excess Capacity Master Storage Contract with the Bureau of Reclamation, culminating an effort that began in 1998.

“This is a great opportunity for the communities of the Arkansas Valley, which allows us to assist and provide them with a more secure water supply for the future,” said Bill Long, president of the Southeastern District board. “It’s been a very long process, much longer than we anticipated, but well worth it.”

The master contract allows participants to store water in Pueblo Reservoir when space is available. Pueblo Reservoir was built by Reclamation to store Fryingpan-Arkansas Project water and for flood control. But it rarely fills with Project water. Excess capacity contracts allow water from other sources, including Fry-Ark return flows, to be stored in Pueblo Reservoir.

The initial contract will allow 6,525 acre-feet of water to be stored in 2017, which will become the minimum number for future years. The contract allows storage of up to 29,938 acre-feet annually for the next 40 years.

For 2017, 16 communities signed subcontracts with the Southeastern District to participate in the master contract. Another 21 communities plan to join once the Arkansas Valley Conduit is built, and do not have an immediate need to join the contract.

Participants in 2017 include: Canon City, Florence, Fountain, La Junta, Lower Arkansas Valley Water Conservancy District, Olney Springs, Rocky Ford, Penrose, Poncha Springs, Pueblo West, St. Charles Mesa Water District, Salida, Security, Stratmoor Hills, Upper Arkansas Valley Water Conservancy District, Widefield.

“It’s a big step for the District,” said Jim Broderick, executive director of the Southeastern District. “The ability to use excess-capacity storage on a long-term basis has been a goal of the District for almost 20 years. This will add certainty to the process.”

Reclamation first issued excess capacity contracts in 1986. Last year, more than 29 excess-capacity contracts were issued more than 60,000 feet – one quarter of the available space in Pueblo Reservoir. For many years, Pueblo Water, Colorado Springs Utilities and Aurora Water were the major entities that used the contracts on an annual basis.

Pueblo became the first community to get a long-term contract in 2000. Aurora first used its long-term contract in 2008. In 2011, Colorado Springs, Fountain, Security and Pueblo West obtained a long-term contract as part of Southern Delivery System.

The next step for the Southeastern District is the Arkansas Valley Conduit. Reclamation anticipates completing the feasibility study later this year, which will allow construction to begin.
“The master contract is absolutely essential to the conduit,” Long said. “It will give us long-term reliability for a clean water supply.”

Arkansas Valley Conduit Comanche North route via Reclamation
Arkansas Valley Conduit Comanche North route via Reclamation

Southeastern water district approves $30 million budget — @ChieftainNews

Fryingpan-Arkansas Project via the Southeastern Colorado Water Conservancy District
Fryingpan-Arkansas Project via the Southeastern Colorado Water Conservancy District

From Southeastern Colorado Water Conservancy District via The Pueblo Chieftain:

A $30 million budget was approved Thursday by the Southeastern Colorado Water Conservancy District board of directors.

The budget is the largest in the history of the district because it reflects spending $12 million in the first phase of a hydropower project at Pueblo Dam. The board is scheduled to consider approval of that project at a special meeting later this month.

“This is an exciting time for the district, with many new opportunities coming to fruition after years of effort by the district board and staff,” said Jim Broderick, executive director. “Every day we are coming closer to fulfilling the vision of those who came before us almost 60 years ago when the district was formed.”

The hydropower project now includes the district and Colorado Springs. The Pueblo Board of Water Works pulled out as partners last month, because it would realize few benefits from the project. When completed, the $20 million project will generate 7.5 megawatts of electric power and become a source of revenue for the district’s Water Activity Enterprise.

The budget’s other large-ticket items include repayment of federal funds for construction of the Fryingpan-Arkansas Project, $7 million, and Fountain Valley Conduit, $5.8 million.

About $24 million is still owed for construction of the Fryingpan-Arkansas Project, which began in 1965. The project includes Ruedi Reservoir, a collection system in the Hunter Creek-Fryingpan River watersheds, the 5.4-mile Boustead Tunnel that brings water across the Continental Divide, Turquoise Lake, the Mount Elbert Forebay and Power Plant, Twin Lakes and Pueblo Reservoir.

The Fry-Ark debt is repaid through a 0.9-mill property tax in the nine-county area covered by the district.

The Fountain Valley Conduit serves Colorado Springs, Fountain, Security, Stratmoor Hills and Widefield, which pay a special property tax.

The operating fund of the district will be $2.3 million, and is funded by a 0.03 mill levy and transfers from the Enterprise fund. The Enterprise operating fund will be $1.8 million, and is mostly funded by fees and surcharges on water activities.

Other than hydropower, the Enterprise will administer excess-capacity storage contracts for district participants for the first time in 2017. The Enterprise also expects the federal feasibility study for the Arkansas Valley Conduit and an interconnection of the north and south outlets on Pueblo Dam to be completed later in 2017. The feasibility study is the final step that must be taken before construction begins.

Arkansas River Basin: “Those releases help keep the rafting industry afloat” — Alan Ward

Twin Lakes collection system
Twin Lakes collection system

From The Pueblo Chieftain (Chris Woodka):

After a wet spring, summer has been relatively dry, and drought conditions are creeping back into Colorado, particularly over the Rocky Mountains in the center of the state and the Rio Grande basin.

River flows have dropped, so Reclamation and Pueblo Water are running water from accounts in upper reservoirs to Lake Pueblo. This serves two purposes: Creating space for imports next spring and providing water for the voluntary flow program that extends the commercial rafting season.

Finding the additional space in Clear Creek, Twin Lakes and Turquoise reservoirs was problematic this year, because reservoirs still were full from a very wet 2015. Twin Lakes filled early with native water and delayed imports from the Western Slope.

The Fryingpan-Arkansas Project has delivered more than 58,760 acre-feet so far, about 90 percent of what had been expected when allocations were made in May.

The Southeastern District, which determines allocations, will adjust agricultural deliveries, because cities already had requested less water than they were entitled to receive.

Pueblo Water imported about 13,500 acre-feet of water, about 92 percent of normal. Part of the reason was the lack of free space at Twin Lakes, and part was due to maintaining long-term limits since storage space was scarce anyway, said Alan Ward, water resources manager.

Pueblo Water will lease more than 21,700 acre-feet of water this year because of the potential storage crunch earlier this year.

Even so, Pueblo Water had 49,133 acre-feet of water in storage at the end of June, which was down from last year, but 17,600 acre-feet more than was in storage at the end of May. Most of the gain came in the upper reservoirs, and is now being sent to Lake Pueblo, where it is needed for leases and to make space, Ward said.

“Those releases help keep the rafting industry afloat,” Ward said.