Tensions between the San Juan Water Conservancy District (SJWCD) and the Pagosa Area Water and Sanitation District (PAWSD) continue to grow over their jointly owned Running Iron Ranch.
At recent meetings, board members of both organizations have criticized the other, the PAWSD Board of Directors voted to file for declaratory judgment concerning its ability to sell the ranch and the SJWCD Board of Directors voted to release a public statement concerning the ranch.
These actions follow meetings where PAWSD voted to take steps toward selling the Running Iron Ranch, including engaging in consultation over the sale with the SJWCD and the Colorado Water Conservation Board (CWCB), and obtaining an appraisal for the property.
PAWSD, the SJWCD and the CWCB are the parties to a 2015 three-way agreement concerning the reservoir project and the responsibilities of each organization concerning the parcel.
This agreement outlines that the CWCB holds the loans for the property for which PAWSD must provide payments while the SJWCD works to find partners to build a reservoir.
It also states that the CWCB possesses the right of first refusal if PAWSD moves forward with selling the property, which the agreement gives it the sole discretion to do following consultation with the SJWCD.
After a consultation meeting on Sept. 24, PAWSD legal counsel Marcus Lock sent a letter to the SJWCD on Sept. 27 expressing concerns about whether the SJWCD intends to attempt to obstruct PAWSD selling the ranch and demanding an acknowledgment from the SJWCD that PAWSD is allowed to sell it.
If SJWCD failed to do this, Lock’s letter threatened legal action against the district.
At an Oct. 10 meeting, the PAWSD board heard a public comment from SJWCD president Candace Jones, who indicated that she spoke in her capacity as a PAWSD customer and not as a representative of the SJWCD board.
Jones stated that PAWSD is taking steps to sell the Running Iron Ranch and thus abandoning the reservoir project for which the land was initially purchased.
She commented that it is “not good public policy” for PAWSD to sell the property without a “robust public planning process.”
The boards have been “polarized” for 10 years, Jones stated, adding that the PAWSD board recently blocked an attempt to create river access on a portion of the Running Iron Ranch adjacent to the San Juan River, as well as blocking river restoration work on the river adjacent to the ranch.
“Spite should not drive public decision-making,” she said.
She added that, if PAWSD is confident it has the water it needs, it should be willing to engage in a “cooperative community planning assessment.”
Jones noted that this planning process would benefit local governments as well as other users.
“All of us should be striving to make decisions based on current objective facts, not well-worn opinions of parties to a generational feud,” Jones said. “PAWSD and the conservancy district must also be responsible stewards of the public’s existing investment in the ranch. Backroom meetings between PAWSD representatives and potential private buyers should not substitute for a robust public process, including development planning.”
She commented that a reservoir is not incompatible with potential near-term uses of the ranch, although more work needs to be done to synergize them, and that long-term planning is critical for both PAWSD and the SJWCD.
“Water is essential to this community, and PAWSD and the conservancy district owe it to the community to make decisions about critical infrastructure and property investments based on facts and good-faith evaluation of them, not personal animosities,” Jones said.
PAWSD chairman Jim Smith asked the board if it had any replies to Jones’ comments.
PAWSD board member Glenn Walsh declined to comment except to note the “irony of the spite invective character assassination involved in this presentation.”
PAWSD board member Gene Tautges thanked Jones for her comments and highlighted that PAWSD has existed since before the conservancy district was founded and has been planning for “these kinds of things.”
He noted that objective facts need to be considered and that there are other potential solutions to water planning.
“So, we just need to make sure that everybody understands the ownership, who’s paying the bills, how long the bill has been paid and is it producing to the public. And I think once you take all of this into consideration, then better facts and better decisions already have come out and probably will come out in the future,” Tautges concluded.
Later in the meeting, the board discussed Running Iron Ranch further.
PAWSD board member Bill Hudson opened the discussion by stating that he recently received a phone call from a local real estate agent who stated that he wanted to convey an offer to purchase the ranch and that the potential buyer might be interested in an easement on the ranch to allow the future construction of a small reservoir.
He commented that he liked the idea that a sale could be a “win-win” for the community, freeing PAWSD of the costs and debt it currently holds on the property while allowing for future development of a reservoir.
Walsh commented that this would assume an “intelligent planning model for drinking water in this community,” based on actual community water usage data.
He added that this type of model is what PAWSD has been doing despite “certain kind of reckless, kind of slanderous charges that you hear.”
Walsh commented that this approach might allow for the construction of a “modest” reservoir similar to Lake Hatcher or Stevens Lake, although, according to Walsh, it would be incompatible with SJWCD’s current reservoir construction plans.
Hudson pointed out that SJWCD legal counsel Jeff Kane presented to the Southwest Water Conservation District board about the ranch, raising concerns that Hudson stated he believed represented the SJWCD’s concerns and requesting a more extensive planning process prior to selling the ranch.
He explained that Kane proposed that PAWSD has not fulfilled its obligations to consult with the SJWCD prior to selling the ranch.
Hudson then noted his objections to previous water demand modeling conducted by SJWCD consultant Wilson Water Group, which Kane referenced in his presentation, and his concerns about land trades or acquisitions that would be necessary to develop the size of reservoir current in SJWCD plans.
Hudson closed by commenting that the consultation process proposed by Kane is “rather extensive.”
Smith suggested the large amount of water that PAWSD has available if it is able to build the pipeline and lift station that would be necessary to connect its water system to Stevens Lake.
Walsh commented that this would be cheaper than building a new reservoir and that PAWSD water demand has not risen since 2001.
He added that PAWSD agreed to a partner approach with SJWCD 12 years ago where PAWSD would pay the loans on the ranch while SJWCD would find partners to build a reservoir.
Walsh noted that SJWCD has not found any partners or related any conversations with potential partners over that period.
He added that PAWSD has done rigorous water modeling that shows that a reservoir is not necessary and that large majorities of local voters have opposed raising taxes to support a reservoir.
Walsh commented that the potential sale might focus SJWCD’s efforts of purchasing the property from PAWSD instead of on building a reservoir.
“It’s easier just to say that we’re backroom dealing, we’re not interested in the process and, you know, we’ve done no studies … we’re just relying upon kind of hackneyed obstruction, all that nonsense than to get out there and actually find partners for this reservoir,” Walsh said.
PAWSD District Engineer/Manager Justin Ramsey stated that he is working on contracting with a company to do an appraisal of the property and that he is hoping to have the appraisal finished before the Nov. 21 meeting of the CWCB.
Tautges expressed agreement with the prior comments, adding that PAWSD’s service plan states that it is a water and wastewater entity and may be unable to financially participate in other interests like water recreation.
He added that there are other options for reservoirs in the area and that the PAWSD board has consistently been financially responsible.
Walsh commented on the accuracy of PAWSD’s water modeling and its conservative assumptions about how much water will be needed in the future.
He also noted that the current payments on Running Iron Ranch are not a “windfall” for the district and cause a financial burden for the district.
Tautges commented that the people commenting on the sale of the ranch may not have accurate information and might think differently if they did.
A reservoir on Running Iron Ranch would be highly impractical for PAWSD use, Walsh commented, adding that the current timeline for constructing a reservoir is “silly.”
At an Oct. 14 meeting, the SJWCD board heard a public comment from Hudson noting the possibility that a purchaser of the ranch would be willing to allow the construction of a reservoir on the property prior to the board meeting in executive session.
Following an executive session, the SJWCD board discussed the potential sale of the ranch further and voted to send a reply to Lock’s letter.
Jones noted that Kane had circulated a draft of the response to PAWSD to the board members for their review.
SJWCD board member Charles Riehm asked if the letter would be public, which Jones confirmed, adding that she feels it is important to inform the public about the SJWCD’s objections to the sale.
Jones stated that having lawyers exchange letters is not an “effective way” to discuss the project and that it is “unfortunate” that there has not been more communication between the districts.
“We all are familiar in this season with misinformation and disinformation, and we need to find effective ways to have … effective conversations with people in this community to understand what’s happening and be as factual as we can with that,” Jones said, adding that the three-way agreement between PAWSD, the SJWCD and the CWCB is publicly available on the SJWCD website.
“We know full well that certain members of the PAWSD board have had it on their agenda to sell this property,” she said. “I’ve heard them say it a long time. But, we also need to be cognizant that … our respective predecessors made agreements, we are bound by agreements, and they made an investment in property looking ahead, looking far ahead for the water situation in this community. And, you know what, a lot of people make investments in property with very long-term planning objectives, and that’s a legitimate and useful use of funds and … so, to kind of be shortsighted about having to pay for investments that will have long-term payoff is something we need to have people thinking about, as well.”
Riehm expressed desire for further consultations about other offers and for the SJWCD to receive new information on a “timely basis so we can provide our input without going through lawyers. So, I’m just encouraging that we get some consultations going on before things go down the road of spending money on lawyers to talk to each other. We can talk to each other. We all live here.”
In Kane’s Oct. 15 reply to Lock, Kane opens by stating that the SJWCD remains committed to consulting with PAWSD concerning its desire to mitigate the costs of the Running Iron Ranch, “PAWSD’s rushed, closed-door process and legal posturing to date.”
He states that this consultation must be guided by the entirety of the three-way agreement and by “authoritative, reliable information” about if Running Iron Ranch is the most cost-effective location for additional water storage for the community.
He notes that the three-way agreement states PAWSD has the “sole discretion” to sell the Running Iron Ranch, but that PAWSD is also instructed to make “every effort” to retain the property during the planning period laid out in the agreement, which ends in 2035.
“How would PAWSD substantiate that it has made every effort to retain Running Iron Ranch when it is proceeding based on one unsolicited offer and more than 10 years remain in the Planning Period?” Kane states. “How would PAWSD substantiate that it has completed its consultation obligation to SJWCD and CWCB on the basis of one closed-door meeting in which little technical or financial information was discussed?”
He comments that PAWSD committed to the agreement in exchange for debt relief from the CWCB and “it appears, however, that PAWSD is attempting to renegotiate the 2015 Agreement to get what it could not then: a way to abandon the Project and the community’s investment in Running Iron Ranch well before doing so could be justified.”
Kane adds that this agenda is contrary to PAWSD’s promises in the agreement and to the compromise reached by the parties in 2015.
He comments that, if PAWSD wants to engage in a “meaningful consultation” with the SJWCD and PAWSD, it should discuss and analyze a wide range of issues with them.
Among the issues and tasks Kane points out are PAWSD engaging with the SJWCD and others in a comprehensive water needs assessment; an engineering analysis of alternatives to creating a reservoir in Dry Gulch to meet future community water needs, including periods with wildfires or extreme droughts; an analysis of PAWSD’s implementation of such alternatives and if PAWSD’s system could withstand a severe drought; an economic analysis of “whether the public benefits of the community’s investment in the Running Iron Ranch should be jettisoned by sale to a private party;” and an analysis of PAWSD’s efforts to generate income or other public benefits from the ranch in ways compatible with the reservoir project, including by allowing river access or generating solar power there.
Kane comments that these discussions should occur in public forums that promote community involvement.
He continues that the SJWCD understands PAWSD’s desire for debt relief and is willing to work with the CWCB and other partners to help accomplish this, but that PAWSD is currently trying to place the burden for this debt relief on the SJWCD and the CWCB alone and “threatening legal action rather than developing thoughtful, mutually beneficial solutions.”
He adds that the SJWCD directors request that PAWSD directors engage in “cooperative efforts and meaningful deliberations that respect the interests of each party’s constituents.”
Kane states that, at the Sept. 24 meeting, SJWCD representatives made clear that Running Iron Ranch is still the best location for a reservoir in the district’s view and that this view is based on “decades” of studies and community investment in the project.
“While SJWCD will faithfully abide by the parties’ agreements and other legal obligations, its directors expect the same commitment from PAWSD, including that it make every effort to retain the Running Iron Ranch,” Kane concludes.
At an Oct. 24 special meeting, the PAWSD board voted to “direct district counsel to initiate legal proceedings for declaratory judgment defining the rights and responsibilities in the contractual language in the 2015 CWCB agreement.”
Prior to the vote, Walsh commented that PAWSD is not seeking a “global recounting and reissuing” of both parties’ grievances, but is seeking a “very strict court determination of what this contract means.”
He added that this could be distinct from any other positive and cooperative relationships PAWSD has, although the action may have an “oppositional quality.”
He concluded that “everybody needs to know” what the three-way agreement means.
Following the vote, Walsh moved to resolve that the board is accepting “serious offers” to sell Running Iron Ranch and to direct staff to continue with the appraisal process.
The board unanimously approved Walsh’s motion.
He then moved to direct PAWSD’s Running Iron Ranch subcommittee, composed of Walsh and Hudson, to continue discussions with potential buyers of the ranch “in a manner which is mutually acceptable and mutually beneficial in the short-, medium- and long-term interests of both” PAWSD and the SJWCD.
This motion also passed unanimously.
Following an executive session to discuss Running Iron Ranch at an Oct. 29 special meeting, the SJWCD board voted to release a public statement concerning the potential sale.
Jones indicated that the board plans to have the statement released by Oct. 31.
The PAWSD board held a special meeting after press time on Oct. 30, with agenda items including an executive session to discuss Running Iron Ranch and potential action related to the executive session.
Results of this meeting will be reported in the Nov. 7 issue of The SUN.
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