Water lease issue heats up

Addressing the Pagosa Springs Town Council Tuesday night, Marsha Preuit, representing the Spa Motel, echoed a sentiment shared by several members of the audience who also stood up before council: “Proceed with caution.”

The matter of discussion — and some contention — was the proposed lease of geothermal water, effluent from the town geothermal system, to the Springs Resort. With details of the draft lease agreement presented at the meeting, citizens speaking before the board voiced concerns regarding the amount of water at stake, the length of time, and what the town would be charging for the water.

Although not a 50-year lease (which would violate the Town Charter), the draft agreement offers multiple 10-year leases to the Springs Resort as well as stipulations for lease renewals. The agreement would give the Springs Resort 400 gallons per minute (GPM) after the water’s use in the town system.

Former town manager Mark Garcia, speaking before the board for the first time since resigning his post in late-April, said that considering the current energy crisis and with the emphasis on the development of alternative energy technologies, “I think it’s premature to estimate a value on geothermal resources.”

Local resident J.R. Ford concurred, while also objecting to “no time line for the agreement, tying up the geothermal water for just one company.”

Jean Gray likewise expressed doubts about the agreement, saying, “This has been negotiated in a one-sided contract. There’s no way for the town to get out of this lease, no off-ramps.”

However, it was Preuit who had the strongest criticisms of the deal, saying that, “$30,000 for that water is nothing,” and adding, “I have problems with the executive session with (Matt) Mees and (Bill) Dawson ... I don’t understand why they were there, but we weren’t invited.”

After hearing comments from the public, council made it clear that it had its own issues with the draft lease, ­if not necessarily the overall agreement.

Council member Stan Holt asked about conditions being met to justify the amount of water (400 GPM) offered up in the agreement. “I’d like to see it added that progress is shown in the development,” Holt stated.

Holt also objected to The Springs Resort’s filing for rights on the town’s geothermal wastewater, saying, “Filing by The Springs Resort on the discharge water needs to be dropped before we proceed with this agreement.”

Asked about its filing for geothermal rights, The Springs Resort did not respond to calls or e-mails as of press time Wednesday.

Council member Angela Atkinson echoed a concern brought up by several audience members, asking if 400 GPM would undercut the town’s own needs, especially in light of a proposed geothermal greenhouse project. “Would 50 GPM (the estimated remainder of geothermal discharge not committed in the lease agreement) be enough for the greenhouse or other projects?”

Atkinson’s question remained unanswered. In fact, with a feasibility study for the greenhouse still pending, GPM requirements for the project will probably not be known until results from the study are released, Mayor Ross Aragon said in a follow-up interview.

Finally, concerns by council were voiced by council member Shari Pierce, regarding the disposal of treated and untreated geothermal water. Pierce pointed out that a statement issued by the Division of Water Resources in July 2000 contradicted suggestions in the agreement for disposal of excess geothermal water and demanded that further drafts of the agreement countermand the disposal clause.

One issue not raised in council was a missing section of the agreement dealing with new technologies. Previous drafts of the agreement allowed the town to renegotiate the lease should new energy technologies develop and, therefore, change the town’s approach to geothermal water usage. According to town sanitation and geothermal water supervisor Phil Starks, “Nobody really knows why, but somehow that got changed.”

Starks did say, however, that the technology stipulation would be added back into future drafts of the agreement.

Despite various issues indicating a need to reconsider at least some of the agreement, it was clear that a few council members, faced with the allure of a $250 million expansion of the Springs Resort and the potential for boosted tax revenues, were determined to get an agreement hammered out, the sooner, the better.

Despite his own misgivings regarding the current draft of the agreement, Holt reiterated his ultimate support for leasing geothermal water to The Springs Resort, saying, “We’re a sales tax-driven community and a $250 million expansion will mean a lot more money for the town and county.”

Council member Mark Weiler was no less adamant in his overall support for seeing some kind of agreement pass. “I suspect,” said Weiler, “That a fully built-out Springs Resort would mean a $9 million growth in tax revenues,” adding that his numbers were based on his “own rough math.”

Yet, given the problems with the agreement draft identified by council members and ordinary citizens alike, council decided to continue the discussion on the lease at its mid-month meeting.

Clear in his support for an agreement moving forward, Aragon passionately appealed to all in attendance to consider the bigger picture — and not be too judgemental.

“We have done nothing illegal; I checked with the town’s attorney and he’s assured us that we’ve done nothing illegal. My emphasis from the get-go has been to provide economic stability for the community. My perspective is we need development. I have to do what I think is right in representing our town. We are not doing anything illegal and if we are harming you, let us know. All we’re trying to do is act in the best way we know how. We will die on the vine if we don’t have some kind of plan.”

Council will consider “some kind of plan” when a revised draft agreement will be delivered at the mid-month council meeting

jim@pagosasun.com