At its Feb. 17 meeting, the San Juan Water Conservancy District (SJWCD) Board of Directors continued its discussion of the high costs of litigation concerning the potential sale of the Running Iron Ranch and its impact on the SJWCD budget.
The Running Iron Ranch is jointly owned by Pagosa Area Water and Sanitation District (PAWSD) and the SJWCD, and the SJWCD is undertaking efforts to build a reservoir on the site.
In the fall of 2024, PAWSD initiated efforts to sell the property, which the SJWCD has opposed.
Following disputes between the districts over PAWSD’s ability to sell the ranch under a 2015 agreement between the SJWCD, PAWSD and the Colorado Water Conservation Board, PAWSD filed a lawsuit against the SJWCD in December 2024 seeking a judgment that PAWSD is allowed to sell the ranch despite the SJWCD’s objections.
At its Jan. 20 meeting, the SJWCD board discussed the costs of the lawsuit, noting that it had already spent about $4,600 of the $10,000 allocated in its budget for Running Iron Ranch litigation.
At the Feb. 17 meeting, SJWCD board member and treasurer Joe Tedder explained that the district has now spent $11,353 in two months of litigation, overrunning the budget for the year.
Tedder proposed that the district increase the Running Iron Ranch litigation budget to $25,000, although he noted he was unsure if this would be the “right number.”
He added that the district could reduce another spending category by the amount increased or increase the district’s overall budget and take money out of reserves.
SJWCD board member Charles Riehm commented that the district should increase the overall spending budget to ensure it does not have to pick and choose between reducing other programs until its reserves are low enough that other items must be cut.
SJWCD legal counsel Jeffrey Kane commented that the district would likely have to hold another budget hearing if it increases its overall spending, although it would not have to do so if it moved funds out of contingency.
In response to a proposal from Riehm, Tedder explained that the district has $10,000 in contingency for its 2025 budget and that it could move this to the legal fund to increase its litigation budget to $20,000.
SJWCD board president Candace Jones proposed that the board use contingency to pay its current legal costs and prepare to hold a hearing to amend the budget, which she noted requires 30 days public notice.
Tedder raised concerns that, if the lawsuit is lengthy, the board could overrun even the $25,000 budget he proposed.
He added that the budget was based on the assumption that the judge would make a quick ruling on the matter.
Jones commented that the board could take money out of its engineering budget to pay for the litigation costs and that it should potentially discuss an overall revision to the budget in few months when it has received an engineering report on the reservoir project from engineering firm Yeh and Associates and has a clearer idea of the direction of the lawsuit.
Tedder noted that the district has considerable flexibility to move money between funds if it does not impact the district’s bottom line, which Kane confirmed.
Tedder then moved to transfer $15,000 from the engineering and studies fund to the district’s litigation fund.
“I hate doing this,” SJWCD board member Bill Nobles commented.
“I do, too, but we can always recover later,” Tedder said.
The board unanimously voted to approve the transfer.
josh@pagosasun.com
