At its June 9 meeting, the San Juan Water Conservancy District (SJWCD) Board of Directors spoke with Colorado Sen. Cleave Simpson about its needs in developing a reservoir at Running Iron Ranch.
The SJWCD is currently engaged in litigation with the Pagosa Area Water and Sanitation District (PAWSD) over its attempt to sell the ranch where the reservoir would be located despite the opposition of the SJWCD.
The discussion opened with Simpson introducing himself and explaining that he represents Senate District 6, which includes Archuleta County, and that he lives in Alamosa and serves as manager for the Rio Grande Water Conservation District in the San Luis Valley.
SJWCD president Candace Jones thanked him for coming and noted that he had briefly toured the Running Iron Ranch property prior to the meeting.
Jones then explained the history of the reservoir project, stating that the reservoir creation effort has its origins in efforts in the 1970s to secure conditional water rights for storage in Colorado.
She stated that the district was formed in 1987 with the goal of making progress on utilizing these conditional rights to create water storage in the area.
The district looked at several locations for a potential reservoir, Jones stated, including Hidden Valley Ranch, which was its top choice.
However, after the ranch was sold, efforts shifted to creating a reservoir on the Running Iron Ranch, she explained.
The size of this potential reservoir was limited to 11,000 acre-feet (AF) following litigation between the SJWCD, PAWSD, Trout Unlimited and other parties about the reservoir’s impacts on instream flows in the San Juan River, Jones stated.
She explained that the Running Iron Ranch was purchased in 2009 with a $1 million grant from the Colorado Water Conservation Board (CWCB) awarded to the SJWCD and $9.2 million in loans to be repaid by PAWSD.
Following this purchase, relationships between PAWSD and the SJWCD, which had shared most of their board members and worked closely together, deteriorated, Jones stated.
The loan from the CWCB was restructured in 2015, Jones stated, with the loan divided into two tranches, including one to be paid off in the next 20 years and encompassing the amount of the original debt, and another encompassing the accumulated interest on the loan to be paid off once the first tranche is repaid.
PAWSD’s loan payments are about $260,000 a year, Jones indicated.
She added that the loan restructuring agreement also outlined a timeline for the reservoir project, including a 20-year planning period from 2015 to 2035.
She commented that this period was likely intended to allow the districts time to plan how to move forward on the reservoir in a “less acrimonious environment,” although she noted that this environment has never materialized, to the detriment of the SJWCD.
Jones noted that this acrimony has hindered the district’s ability to raise money since funders are less interested in supporting a project that includes an unwilling partner like PAWSD.
She explained that the PAWSD board does not believe that the community needs a reservoir and wants to exit the project and free itself of the associated costs.
Jones indicated that the SJWCD is willing to work with PAWSD to find a way to leave the project, which could include raising funds, finding a new partner to support the project or creating a new arrangement with the CWCB.
She commented that issues with estimating water needs have also been a barrier to the project.
Although the SJWCD commissioned a water demand estimate in 2022 that showed the 11,000 AF reservoir size would be necessary to satisfy holistic water demand in the future, she explained that this estimate did not create consensus and that more detailed analyses would be difficult without cooperation from PAWSD.
Simpson asked how many people the reservoir could serve for irrigation.
Jones stated that there are some ranches and other agriculture to the south along U.S. 84 and that the Park Ditch, which the reservoir would be connected to, runs in that direction.
However, she added that agricultural water needs in the area have generally been expected to decline due to increased development.
Jones stated that there is no storage for water used by the PAWSD Snowball Water Treatment Plant that serves downtown Pagosa Springs and that the reservoir could provide storage for this plant if there was no water available in the San Juan River, although this would require building a pipeline to connect the reservoir and the plant.
PAWSD received an offer from Zipper Valley Ranch in the fall of 2024 to purchase the Running Iron Ranch at a price that would repay PAWSD’s debt and provide land to build a 3,000 AF reservoir and has been supportive of it, Jones stated.
According to the proposal presented by Zipper Valley Ranch representative Trey Fricke at the May 29 meeting of the PAWSD Board of Directors, this purchase would include an easement for the construction of a reservoir, but would provide no construction funding for the project from the developer.
Similar to the current agreement between the SJWCD, PAWSD and the CWCB, this proposal would place the burden of finding design and construction funding for the reservoir on a local water district and would impose an approximately 10-year timeline, including fundraising deadlines and reporting requirements, for the project.
Outside of the easement, the only contributions from the developer to building a reservoir would be $10,000 a year to support project engineering and the potential to negotiate with the CWCB to have it forgive a portion of the loans and contribute this to project funding, although these negotiations have not formally begun and this would occur at CWCB discretion.
At the meeting, Jones raised concerns that the water modeling and engineering needed to properly plan a reservoir has not been done, although she commented that there might be monetary value in selling the portions of the ranch that are not used for a reservoir.
She closed by commenting that she wants to get many of the outstanding questions about reservoir sizing and structure answered to help the project move forward.
SJWCD board member Rob Hagberg explained that the 11,000 AF reservoir would require purchases of property from the U.S. Forest Service and a private landowner to encompass the land that would be inundated.
He added that a smaller reservoir would have issues with siltation and would require measures to address it, as well as potentially not meeting the district’s needs.
Simpson asked how the district has defined its water needs.
Hagberg commented that the district has struggled to assess these needs, although it is interested in many needs beyond municipal water, including recreation, forest health and agriculture.
Jones explained that the SJWCD commissioned a water needs study from Wilson Water Group in 2022, which incorporated municipal, recreational and some agricultural water needs.
She also noted that the project is not purely intended to address PAWSD’s needs and that the SJWCD understands that PAWSD wants to leave the project.
Jones then referenced earlier public comments from PAWSD board member Bill Hudson stating that the voters have previously rejected ballot measures to raise taxes to fund elements of the reservoir project by large margins, highlighting that “there’s a big difference between what the voters will vote to pay for and what the voters want.”
She noted that the voters also rejected funding for Archuleta County to build a new jail, although they have supported initiatives for the Archuleta School District.
Jones pointed out previous poor planning by local governments that has led to significant expenses and commented, “I don’t want to the reservoir end up with the same model of somebody comes in and says, ‘Sell it to me on the cheap and I’ll help you build the next big thing,’ and then they’re like, ‘Yeah, we never really meant to do that,’” Jones said. “So, that’s what I get concerned about.”
Simpson commented that information was helpful and asked what the district wants him to help with.
Jones stated that the district would like Simpson’s assessment of if there is the potential for an arrangement with the CWCB or another group to relieve PAWSD of its debt and keep the property in public hands while the SJWCD works on reservoir funding and construction.
She also commented on and criticized a “bright idea” previously offered by Fricke to use eminent domain to take more land for the reservoir and stated that, once the property is sold, it will likely be permanently gone.
Jones commented that the water rights the district holds for the reservoir would be impaired by losing the property.
Simpson asked if the SJWCD has engaged with Southwestern Water Conservation District (SWCD) or the CWCB Southwest Basin Roundtable about approaches to maintain ownership of the property.
Jones commented that the district has engaged with these groups and kept them informed about the situation, although she noted that potential funders are deterred by the district “having to drag along an unwilling partner.”
In response to a question from Simpson, Jones explained that it would cost about $10.4 million to purchase the property and remove PAWSD from the project.
She added that having collaborative partners on the project would be valuable, although she commented, “I’ll tell you, to not have the weight of the constant naysaying and sniping and general distaste in the community would be a huge relief.”
Hagberg commented that the SJWCD would like the state to indicate that it is interested in and supportive of water storage in the area, which would be critical since the work would likely require state or federal funding.
Without this support, Hagberg stated that he does not personally see how the project could move forward.
SJWCD board member Bill Nobles commented on his concerns about the public losing access to the water and his desire for the water to stay in the community.
He added that future water needs for the area have not been clearly established and that the reservoir could serve a variety of purposes, including supporting future municipal water needs or providing alternative water sources in the case of wildfire.
Simpson asked how much analysis of water needs was incorporated in the 2022 CWCB Basin Implementation Plan for the area.
He added that much of the demand data might already be available.
Jones and Nobles commented that water needs in the community were not addressed in the plan.
Jones continued that more data is needed and that the community needs to determine how to “work together on water” which would involve various groups “stepping up to our roles.”
She commented that reducing the financial burden on PAWSD might be a step toward a “less acrimonious conversation,” although she added that this could also occur independent of this work.
SJWCD board member Randy Cooper commented that another problem is the cost of building the reservoir.
He cited a 2008 estimate of the reservoir cost which placed the cost of a 12,000 AF reservoir at $47 million and the cost of the reservoir and infrastructure to transport water to a PAWSD treatment plant at about $180 million.
He noted that costs likely have risen since then, although he stated that the SJWCD could likely build a dam at the location for less than $200 million.
Jones explained that the district is working on engineering to create a more current estimate of the costs and to give the community more information to make “informed decisions.”
She commented that, if the reservoir is not justified by this research, then she could “go and enjoy my retirement” but, if this is not true, that the data could be used to continue developing the project.
She added that the SJWCD is actively litigating to prevent PAWSD from selling the property and criticized how the Zipper Valley Ranch proposal would include purchasing the water rights associated with the reservoir and potentially taking them out of public hands.
Although comments from SJWCD and PAWSD board members have suggested that a previous offer from Zipper Valley Ranch would include such a purchase, the proposal present at the May 29 PAWSD meeting did not include the purchase of water rights associated with the reservoir, as Jones claimed, although it did include the purchase of water rights for irrigation on the property.
Jones then thanked Simpson for attending the meeting.
Simpson stated that he would try to reach out to the CWCB and discuss the project and that he is involved in the approval of a water projects bill every year, although he noted that he had not seen it include a water project of this exact form in the past.
Jones commented that she would appreciate his outreach and assistance.
Later in the meeting, the SJWCD board heard a public comment from SWCD board member J.R. Ford relating to the discussion with Simpson.
Ford commented that the opposition to Archuleta County building a new jail was rooted in concerns about the size of the jail and a desire to have it scaled to the community, not in opposition to the county building one.
“I think that’s a great example of what some of us are trying to tell you guys,” Ford said. “We’re not against the reservoir, we’re against the reservoir not being scaled for what our community really needs.”
Ford commented that the board would need public buy-in and support in the grant funding process since funders would ask about it.
He stated that the district “can’t say that” it has such support and this will harm its grant situation.
He suggested that the district speak with Fricke more and determine whether his proposal would be unsuitable and what the reasons for this would be.
“Because just saying we’re not interested because we won’t have public access or whatever the other reasons are, I don’t think’s going to go over well with the community,” Ford said.
Ford added that the district could also request a mill levy tax increase to allow it to take the Running Iron Ranch from PAWSD and pay off the debt.
He noted that the SJWCD board lost a public vote about whether the community wanted to build a reservoir at its proposed 11,000 AF size and then, a few months later, arranged a deal with the CWCB for loan funding when the public had just rejected the project.
“I think what happens with these districts is we sit amongst our group hearing what the needs are and we decide we’re going to drag the public along, and that doesn’t work very well, and I really feel that’s kind of where you guys are at,” Ford said.
He concluded that the public does not buy into the project and that, unless it does, it will be difficult for the SJWCD to show public support to funders and receive money.
Jones responded that she is “so tired” of reviewing the history of the project and that she would like to move forward with a process to clearly establish the needs and cost for the reservoir so the public can review it.
“Because, otherwise, it’s chicken and egg,” she said. “And all we have is people dragging stuff out of some closet somewhere covered with dust and we go back over and over and over again and the history. … I want to move us forward and I absolutely agree with you that we need public buy-in, and I think we need the information to be able to show people what their options are.”
Ford commented that the SJWCD is not using the public buy-in it has through actions like rejecting community-generated growth rate and water needs data and instead using contradictory studies by outside consultants.
