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PAWSD talks gravel mining on Running Iron Ranch


The Pagosa Area Water and Sanitation District (PAWSD) Board of Directors heard an update from its Running Iron Ranch subcommittee and discussed the future of the property it jointly owns with the San Juan Water Conservancy District (SJWCD) at its May 23 meeting.

PAWSD board member Glenn Walsh opened the discussion, explaining that he and PAWSD board member Paul Hansen met with Donald Andrew “Andy” Weber, representative for Weber Sand and Gravel, who showed the group a location where approximately 80,000 tons of gravel could be mined on the property.

Walsh indicated that the area where this mining would occur is already disturbed and that he, Hansen and Weber discussed two options for the process, including Weber mining and selling the gravel to outside buyers with PAWSD being paid a $2 royalty per ton or Weber mining and crushing the gravel for PAWSD, who could purchase it and use it on future projects.

Walsh commented that the second option would be “a lot of money” but that it would save PAWSD significant future expenses due to the district not having to pay higher gravel and transportation costs for gravel purchase elsewhere for future projects.

He stated that the first option would generate about $160,000 in revenue, while the second could save “over a million dollars” for the district.

This gravel could also be sold to Archuleta County if it is not needed by PAWSD, Walsh added.

He stated that he found the fact that the second option might save more money and that it would leave the gravel on the property as an asset, either for PAWSD or the SJWCD, desirable.

Walsh added that the location of this mining project would be farther away from the Log Park subdivision, whose residents have previously complained about gravel operations at the ranch.

However, although Walsh stated that he appreciates the comments from the Log Park residents, he noted that they only compose “1 percent” of the district customers and “we have to look out for the other 99 percent of our customers too, and, that’s a balance.”

He then asked the board if it wanted to move forward with either of proposals for gravel mining.

PAWSD board member Bill Hudson pointed out, “We don’t have a clear consensus from San Juan, who claims that … as tenants in common …”

“Well, they’re right,” Walsh interjected.

“They have the right to … tell us what to do with the property,” Hudson continued.

He then commented that members of the SJWCD board had been supportive of the proposal at a recent joint work session between the Running Iron Ranch subcommittee and a portion of the SJWCD board, although PAWSD did not have a decision by the full board.

Walsh commented that he would advocate for retaining the Running Iron Ranch if the property can be used in ways that pay the loans on it.

He stated that the potential $1 million savings on gravel could pay 40 percent of the loan payments for the next decade and that a potential mobile home park or a La Plata Electric Association (LPEA) solar electricity generation location could generate additional revenue.

“Then we kind of have our cake and eat it, too,” Walsh said. “We have the land. It’s paying for itself. If this community needs a [2,000] or 3,000 acre foot reservoir in 70 years, you got it. If we don’t, we can sell it and it will be worth more. But, I just want to be as clear as I can, even though I’m a supporter of holding it, if we in good faith work with … in this case Andy and come up something that would legitimately save this district $100,000 a year for 10 years and they say no, then I move as quickly as humanly possible to becoming an advocate for selling it because we don’t have a functional relationship that even pays our issues a minimum of regard.”

PAWSD board chairman Jim Smith commented that he agreed with Walsh’s comments.

PAWSD board member Gene Tautges asked what staff’s opinion was on the value of stockpiling the gravel versus selling it.

PAWSD District Engineer/Manager Justin Ramsey stated that PAWSD uses “a lot of gravel” and that the district would use it over time or could sell it off, although he noted that it would be a significant investment.

Tautges commented on his “gut feeling” that there is an interest that might be interested in purchasing the property, and Hansen added that portions of the property have “breathtaking” views.

“I think I just heard you say ‘very developable,’” Tautges said.

Walsh commented that running utilities on the property would likely be the primary obstacle to development.

He added that the board could investigate a sale and options for generating revenue, adding that his focus is ensuring that the bills on the property are paid.

Hansen commented that he believes PAWSD should sell the property.

“My gut feeling, like was mentioned, is we do not have the right to do what we wanna do,” Tautges said. “They could stop it. Whether that would be smart, whether that would be smart and whether they would do it is just the question, and it’s beginning to sound like maybe there’s a little cooperation going on.”

“Well, if they don’t cooperate with us, just like you said, we’ll just sell it,” Smith said.

Walsh stated that one of the potential groups that PAWSD could sell the property to is the SJWCD.

Hudson commented that he proposed this option to the SJWCD board members during the joint work session.

“And they didn’t say no,” Tautges added.

Walsh commented that purchasing the property might provide the SJWCD with a “focus” by compelling the organization to concentrate on finding a state partner to purchase the property.

He added that, if the district could not find such a partner, it could likely not manage to construct a reservoir.

Walsh also stated that the district could work with Weber and the SJWCD to find options to generate revenue, while Hansen, who also serves on the subcommittee, could pursue and bring forward options for selling the property.

“And then that lights a fire under San Juan and they can say, ‘Well … these plans for a recreational piscatorial whatever are fine, but we need to focus on talking to [the Colorado Water Conservation Board] and [Colorado Parks and Wildlife] and see if we can’t get partners to buy this piece of property,’” Walsh said. “And then we don’t care, right?”

“Whatever they want to do,” Smith said.

Hansen commented that local developer JR Ford, who constructed a reservoir on similar soil in Hidden Valley Ranch, indicated that building a dam on a shale surface would be extremely expensive and potentially not worth the effort.

Smith noted that the county soil survey indicates that Running Iron Ranch is not suitable for a dam and questioned why the location was purchased for a dam.

“The question is why do we own it because we don’t want it, and so why do we even own it?” Hansen said.

“All water under the bridge, guys,” Tautges said.

Hansen then reiterated his support of selling the property if the district could repay the loans and other obligations for the site.

Smith expressed support for Walsh’s proposal for placing trailer homes on a portion of the property to generate revenue, with Hansen and Walsh adding that PAWSD could contract with a company to place trailer park pads on the property.

“But my Spidey sense is we’re going to get shot down and what Paul wants to do is what’s going to happen,” Walsh said.

“And my Spidey sense is they’re going to go for it,” Hudson said.

Hudson then asked the board if it would support the subcommittee continuing to urge the SJWCD to purchase the property and bringing forward a proposal about further gravel mining on the ranch.

Walsh stated that he feels the PAWSD board should work with Weber to draft a lease which it could approve and then send to the SJWCD.

Ramsey then noted that the board could develop a lease and then consider and potentially approve it at a meeting.

Hudson asked if drafting a lease would require additional legal fees, which Ramsey stated it most likely would not.

Hudson proposed that, if there are expenses involved, he would like to present the idea to the SJWCD first to see if the organization would approve it before finalizing a lease.

He then asked if the board preferred stockpiling the gravel on the property to selling it off, which the board indicated general support for.

Ramsey stated that any proposed lease should give PAWSD the option to pursue both approaches.

Hansen then asked the board to direct staff to assemble a history of the property, and the legal and financial entanglements involved, to present to real estate agents who might have clients interested in purchasing the property.

Walsh commented that the subcommittee should do this and the group agreed that Walsh and Hansen should draft the history, which could then be reviewed by Programs Manager Renee Lewis.

In response to a question from Ramsey, the board members stated that they would like a lease put on the June meeting agenda for consideration, with Walsh stating that he would like the SJWCD to have a concrete proposal to consider.

Smith raised the question of how PAWSD would get the SJWCD to contribute to tearing down buildings on the property.

Walsh commented that he would prefer to see if the SJWCD would agree to the lease beforehand, with Hansen adding that the subcommittee could negotiate with the SJWCD on the issue.

Walsh added that PAWSD is not on a strict timeline in terms of completing a new lease as Weber would not be ready to begin this mining until later this year or next year due to his outstanding obligations to crush gravel at the site for the PAWSD Snowball Water Treatment Plant expansion project.

Hudson commented that he would like to “get the no as soon as possible if it’s a no” from the SJWCD so that PAWSD could move on with a sale if necessary.

Ramsey stated that PAWSD gave Weber gave permission to continue gravel crushing operations at the site, although the lease agreement with Weber is currently expired.

He added that he is uncertain if these operations without a lease are “wise.”

Walsh proposed that the board could consider two leases at its next meeting, including one for the expansion project work and one for the other gravel mining.

Ramsey stated that PAWSD staff would figure out the correct approach for the leases.

Hudson proposed that the two leases should be rolled into one to compel SJWCD to have to reject the entire package, including the crushing of gravel for the expansion project, if they rejected any element of the lease.

Hansen then questioned why the property is called the Running Iron Ranch instead of the Dry Gulch.

Ramsey explained, “It’s the Dry Gulch project, but it’s the Running Iron Ranch.”

Hudson stated that the SJWCD would also have to obtain additional land to complete its proposed 11,000-acre-foot reservoir in addition to the Running Iron Ranch land and this is a “good name for the reservoir.”

“I thought it was a nickname for the place,” Hansen said.

Walsh commented that, if PAWSD moved forward with a housing project at the site, inhabitants might prefer living at Running Iron Ranch instead of living at Dry Gulch.

“Or the ... San Juan Headwaters Project or whatever …” Hansen said.

“That I never use,” Walsh replied. “It’s the Dry Gulch project. We’re paying the loan on the Dry Gulch project. … That’s what it is. If you’re not paying the bills, you can call it whatever you want, but if you’re paying the bills, you call it …”

“Dry Gulch,” Smith concluded.