Tensions between the Pagosa Area Water and Sanitation District (PAWSD) and the San Juan Water Conservancy District (SJWCD) over the Running Iron Ranch reached new heights last week, with PAWSD filing a lawsuit against the SJWCD and voting to declare its intention to sell the ranch.
At a Dec. 12 regular meeting, following an executive session, the PAWSD Board of Directors voted unanimously to have the district’s lawyer file a lawsuit requesting declaratory judgment concerning the terms of the district’s three-way agreement with the SJWCD and the Colorado Water Conservation Board (CWCB) that outlines how the Running Iron Ranch will be managed.
The board then discussed whether to make a formal declaration that the ranch is for sale, with PAWSD board member Gene Tautges moving to declare that PAWSD is selling the ranch and PAWSD board member Glenn Walsh seconding.
PAWSD board member Bill Hudson noted that the board is now involved in litigation and asked Tautges whether it would be better to make a decision on the sale after the litigation is resolved or to make the decision now.
Tautges replied that “the other parties made it crystal clear their intention, and I think we owe it to them to make our intentions crystal clear, as well.”
Walsh added that the district also should make its intentions clear to its customers that it is seeking the “highest and best offer” for the ranch.
The board then voted unanimously to declare its intention to sell the ranch.
Hudson then proposed that the PAWSD Running Iron Ranch subcommittee, composed of himself and Walsh, be tasked with moving the sale forward, including creating a term sheet and determining how to present the sale to the public.
Tautges commented that he would be willing to assist the subcommittee on the work if necessary.
PAWSD Programs Manager Renee Lewis asked Hudson if this was for the marketing portion of the sale, adding that there would be legal requirements from the board’s previous motion that would need to be worked on with PAWSD’s legal counsel.
Hudson stated that the subcommittee could also reach out and coordinate on the legal aspects with PAWSD’s counsel as well.
The board then unanimously approved this proposal.
The PAWSD lawsuit against the SJWCD was filed the next day in district court in Archuleta County.
After outlining the history of the Running Iron Ranch and of the agreements between PAWSD, the SJWCD and the CWCB, the complaint discusses the terms of the 2015 three-way agreement.
It claims that, as part of a discussion of a potential sale of the ranch, the agreement states, “PAWSD agrees to make every effort to retain the Running Iron Ranch during the Planning Period made possible by this Agreement. In the event that PAWSD, in its sole discretion but after consultation with SJWCD and the CWCB, does sell the Running Iron Ranch during the Planning Period, the following terms shall take effect ...”
The complaint notes that the agreement also contains terms that the parties of the agreement shall execute documents, including loan documents, deeds and conveyances, requested by the other party in accordance with the agreement.
It adds that the SJWCD has expressed its opposition to selling the ranch and its intent to oppose and prevent such a sale.
The complaint then presents its first claim for relief, asking the court for declaratory judgment to clarify the terms of the agreement and to resolve the controversy over if PAWSD has the right to sell the property.
It requests that the court find that PAWSD has a right to sell the property under the terms of the 2015 agreement assuming it meets notice, appraisal and first-refusal terms contained within the agreement, and performs the consultation with the SJWCD and the CWCB required prior to selling the ranch in the agreement.
It also requests that the court either declare that the agreement’s term that PAWSD make every effort to retain the property does not have to be met prior to PAWSD selling the property or find that PAWSD has already met this requirement.
Additionally, the complaint seeks a declaration that the SJWCD is required to sign contracts and deeds necessary for the sale if it occurs.
The complaint continues in a second claim for relief that, if the court rules against PAWSD in its first claim, then it requests that the court partition the property and sell it at a public auction with the proceeds being divided according to the 2015 agreement.
The complaint also argues that the CWCB does not need to be a party to the lawsuit, stating that the relief PAWSD seeks can be obtained without the involvement of the CWCB and that the case will not threaten CWCB’s interests in the issue, including PAWSD’s obligation to consult with the CWCB prior to selling the ranch and PAWSD’s obligation to pay back loans for the property from the CWCB upon a sale.
At a Dec. 17 special meeting of the SJWCD Board of Directors, the board held an executive session to discuss the ranch and to receive legal advice.
Following the session, the SJWCD board voted to enable its lawyer to speak with SJWCD president Candace Jones and SJWCD board member Charles Riehm as needed to receive guidance from the board on the litigation.
Jones then offered a comment on the litigation, stating that the litigation is a “disappointing development” and that, at the board’s last meeting, it had decided to convene a work session on Jan. 6, 2025, to discuss options to move forward with the ranch.
After this, Jones stated that the district planned to reach out to PAWSD.
“So, it’s unfortunate that we didn’t have even those few weeks to make any progress on that,” Jones said.
She added that the SJWCD continues to oppose the sale of the ranch and that it believes that the land and water rights should be kept for public benefit.
She concluded that the 2015 agreement established a planning period for the reservoir stretching to 2035 and that, because this planning period is not over, “we think we are absolutely in right in defending these water rights for the benefit of the public.”
josh@pagosasun.com
