San Juan River Basin: Dry Gulch Project update

October 17, 2014
San Juan River from Wolf Creek Pass

San Juan River from Wolf Creek Pass

from The Pagosa Springs Sun (Renita Freeman):

In the regularly scheduled meeting of the San Juan Water Conservancy District (SJWCD) on Oct.14, board chairman Rod Proffitt discussed the progress and tour of the Dry Gulch Water Storage Facility (Dry Gulch Project), concerns of the Colorado Water Conservation Board (CWCB) and the appraisal value of the Running Iron Ranch.

In a letter of intent dated Sept. 10 between SJWCD and the Pagosa Area Water and Sanitation District (PAWSD), each party agreed to work toward finalizing a satisfactory agreement that both relieves PAWSD of its financial obligations to the Dry Gulch Project and acknowledges efforts by SJWCD to develop the Dry Gulch Project on a more practicable basis with a broader group of interested partners.

The letter of intent stated that an exchange of PAWSD equity in the ranch to the CWCB for substantial debt relief is to both parties’ mutual advantage.

The letter of intent also states that if the principal outstanding on the loan cannot be reduced by the amount equal to the appraisal value of the ranch or $4.6 million, whichever is more, PAWSD may seek other means to reduce its debt to the CWCB. The letter of intent further states that the annual interest rate may be reduced to no more than 1.75 percent and a full term for payment of 30 years.

SJWCD agreed to provide an appraisal of the ranch to the CWCB, which would establish the fair market value of the 660-acre ranch, shared water rights directly and indirectly related to the Dry Gulch Project, and long-term debt obligations to the CWCB incurred in the purchase of the ranch…

Proffitt went on to explain that the problems with comparables done on similar ranches which sold for more was the fact they had more buildings and structures in place, as well as more riverfront on the properties than those of the ranch that was appraised.

Proffitt told the board he had completed a tour of the Dry Gulch Project with CWCB Commissioner James Eklund, Jeff Robbins, legal council for PAWSD, and Kent Holsinger, legal council for SJWCD.

Eklund was impressed with the site, Proffitt explained…

Proffitt told the SJWCD board Tuesday evening that steps should be taken in order to satisfy the CWCB concerns that the board stayed focused on the Dry Gulch Project and did not wane.

“Due diligence is needed to keep the Dry Gulch Project moving forward. Hopefully, the courts will see we are exercising due diligence,” he said.

In an email, CWCB Deputy Director of Resource Management Tim Feehan stated other items CWCB would like to see as part of an agreement going forward: “SJWCD would retain an equitable interest in the Dry Gulch Project and its fee interest in the property. SJWCD would be able to move forward with land exchanges to further the Project.”

Other items for consideration mentioned in the email were that SJWCD would be provided with adequate funding to move the project forward and would take the lead in discussions with the Southern Ute Indian Tribe and other potential partners in the project.

The email went on to state that the CWCB would like to see SJWCD considered as manager/coordinator for the project once it is built and it also needs closure to be on the loan/grant agreement. The correspondence also pointed out a new operating agreement needs to include a forgiveness provision on the loan side of the existing agreement.

More Dry Gulch Reservoir coverage here.

Pagosa Springs: Dry Gulch reservoir update

May 20, 2014
San Juan River from Wolf Creek Pass

San Juan River from Wolf Creek Pass

From the Pagosa Sun (Shanti Johnson):

With the ushering in of a new Pagosa Area Water and Sanitation District (PAWSD) board, the Dry Gulch project and PAWSD’s relationship with the San Juan Water Conservancy District (SJWCD) are once again being defined.

Below is a recap of the current Dry Gulch situation as it relates to both PAWSD and SJWCD.

Rod Proffitt, president of the SJWCD board, was authorized to act of behalf of PAWSD in matters concerning Dry Gulch through May 5.

Proffitt emailed copies of a letter of intent and memorandum sent to PAWSD, regarding Dry Gulch, to The SUN.

In his April 28 memorandum, Proffitt stated, “Because my authority to act on behalf of PAWSD ends May 5th, everything that can be done has been done. For efforts to continue toward fruition, I will need the PAWSD board show its renewed confidence in the process through a vote to extend the existing resolution.”

Proffitt will present a Dry Gulch report to the PAWSD board during its June meeting and will seek agreement on different aspects of the project to continue moving forward.

The memorandum noted that progress has been made this year between the two districts, particularly during a Feb. 17 meeting out of which a letter of intent was prepared and sent to state officials regarding the future of Dry Gulch…

Several “principles of agreement,” dated April 4, were presented to both districts and the state. The proposals are still being discussed and none of the agreements have officially been adopted. The agreements are expected to be formalized on or before Sept. 2.

The SUN was provided with a copy of the April 4 agreements, which propose the following:

• The districts will request that the state forgive half of the $9.2 million loan taken out in 2007 by PAWSD. If the loan restructure is accepted, PAWSD would begin making payments Jan. 1, 2015.

• SJWCD would “exchange its ownership interest in the Ridge Parcel for the Park Ditch water rights associated with the Project …”

• PAWSD would “transfer all right, title and interest in and to the remainder of the Running Iron Ranch to SJWCD by Special Warranty Deed,” except the Ridge Parcel, outlined in a follow-up letter of intent by Proffitt.

• “SJWCD would agree to mortgage its fee simple ownership to the Running Iron Ranch to the State for the amount of $5 Million; said amount to be forgiven if the SJWCD begins work on the Property by December 31, 2024. If work does not commence by that time, SJWCD would agree to sell the property, sign it over to the State, or begin making payments on the outstanding balance at the option of SJWCD.”

• “SJWCD would agree to immediately assume all forthcoming costs and expenses associated with the Project, and will absolve PAWSD of any further or additional obligations under the agreement(s) terminated March 22, 2014.”

Agreements proposed also include protecting the future interests of both districts in purchasing and providing water, attracting different partners to replace PAWSD’s role in the project, and others…

The Colorado Water Conservation Board (CWCB) has been a major player in the Dry Gulch discussions.

According to Proffitt, the CWCB “financed property needed for the development of Dry Gulch to this point … [and] is critical to resolving how PAWSD exits this project and SJWCD moves Dry Gulch forward.”

In an email sent to state officials April 24, Proffitt wrote, “The State has not decided definitively Dry Gulch is a project they want to get behind and support by making it possible for PAWSD to get out of the project without making it impossible for SJWCD to move the project forward.”

Originally, it was believed that CWCB would discuss taking on the project during a closed session in May and then during a public session in July. However, as of May 13, the CWCB has delayed putting Dry Gulch on the agenda. The public meeting will now likely not take place until September.

Proffitt informed The SUN that a meeting with the CWCB is scheduled for June 3 to further refine the Dry Gulch project proposal. Updates on the project will continue to be made available as they occur.

More Dry Gulch Reservoir coverage here.

Proposed MOU between the Archuleta County Board of Commissioners and the Pagosa Area Water and Sanitation District scrapped by county

March 6, 2011

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From the Pagosa Sun (Randi Pierce):

Commissioner John Ranson expressed that, while he was disappointed that the time and effort given to the MoU did not pay off, he believes the withdrawal of the agreement was the right move. “I think it’s exactly the right thing they should have done,” Bunch said in a Wednesday interview. “It gets things back on the basis it should have been on since day one … We are two separate managerial agencies that need to take care of our business.”

A rift between the BoCC and PAWSD began in the fall of 2009, when the BoCC began requesting financial documents from PAWSD, expressing concerns over PAWSD’s spending, Dry Gulch Reservoir assumptions, service plan and more. The rift then deepened last March, when the BoCC began requesting that PAWSD provide the county with an annual report.

The two boards met in a public meeting in March 2010, where the idea of an agreement or memorandum of understanding between the two boards was mentioned by PAWSD Attorney Jim Collins.

More Pagosa Springs coverage here and here.

Trout Unlimited and the Pagosa Area Water and Sanitation District agree to settle Dry Gulch lawsuit and have worked out the terms for a proposed decree

December 10, 2010

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From the Pagosa Sun (Randi Pierce):

The local chapter of TU brought forth litigation in 2004 over concerns that the then 35,000 acre-foot reservoir and accompanying rights for diversion and refill amounted to a water grab on the part of PAWSD. Six years later, the [Pagosa Area Water and Sanitation District] and SJWCD[San Juan Water Conservancy District] boards voted to allow their lawyer, Evan Ela, of the Denver law firm Collins Cockrel & Cole, to prepare a final decree to be submitted to and approved by District Court Judge Greg Lyman, hopefully closing the case.

The two boards made the decision following an executive session with Ela and water engineer Steve Harris at a joint meeting held on Dec. 1. Following the executive session, the boards made the decision and voted to release a letter between Ela, Sen. Bruce Whitehead and Trout Unlimited’s attorney, Andrew Peternell, which outlines the terms of the agreement…

Though litigation with Trout Unlimited should soon cease, it is still unclear whether or not Dry Gulch Reservoir will be built, when or by whom.

More Dry Gulch Reservoir coverage here and here.

Trout Unlimited and the Pagosa Area Water and Sanitation District agree to settle Dry Gulch lawsuit and have worked out the terms for a proposed decree

December 8, 2010

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Here’s Part Three of Bill Hudson’s series titled Dry Gulch gets a little drier running in the Pagosa Daily Post. From the article:

The number that will stick in people’s minds, no doubt, is 11,000. That’s the maximum number of acre-feet allowed to be stored in a future Dry Gulch Reservoir, under this agreement — when combining an existing 6,300 acre-foot SJWCD storage right with a new 4,700 acre-foot storage right.

More Dry Gulch Reservoir coverage here and here.

Trout Unlimited and the Pagosa Area Water and Sanitation District agree to settle Dry Gulch lawsuit and have worked out the terms for a proposed decree

December 7, 2010

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Here’s Part Two of Bill Hudson’s series Dry Gulch gets a Little Dryer running in the Pagosa Daily Post. From the article:

As I say, writing about PAWSD has been an education. The provision of simple, clean drinking water, one of the very few substances absolutely necessary to human life, is not rocket science — after all, we are surrounded by water flowing freely in rivers and streams, and we have numerous underground aquifers accessible by wells. But in political terms, the provision of water is one of the more complicated processes in our governmental system. The right to use water — the water available all around us — is strictly regulated in Colorado, as it is throughout the U.S…

The mountains to the north and east of Pagosa Springs normally collect 300-400 inches of snow during the winter months, and in springtime, the water from the snowmelt slowly enters our local rivers and streams. By June, a massive amount of water is passing through Archuleta County — enough water to supply literally millions of human beings. But the water does not “belong” to the residents of our little community; through a complicated set of legal agreements and court rulings, the water passing through Pagosa Springs every year “belongs” mostly to people living downstream, in Arizona, California, Utah and Nevada.

More Dry Gulch Reservoir coverage here and here.

Trout Unlimited and the Pagosa Area Water and Sanitation District agree to settle Dry Gulch lawsuit and have worked out the terms for a proposed decree

December 6, 2010

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From The Durango Herald (Patrick Young):

The agreement, coming after an hours-long negotiation moderated by Sen. Bruce Whitehead, D-Hesperus, effectively ends years of dispute between the districts and the environmental group. “There was a willingness, I think, and a desire for both parties to come together,” Steve Hartvigsen, director of the Pagosa Area Water and Sanitation District, said Saturday.

Though the districts originally requested water rights for 35,000 acre-feet, the agreement gives them the necessary water rights to construct a reservoir no larger than 11,000 acre-feet. In return, Trout Unlimited agreed to drop its opposition to the districts’ water rights request. The next step in the process is to put the terms of the agreement in writing and, once the draft is agreed upon by all parties, it will go to the water division for approval by the division engineer before going to the district water court for final approval…

Both Hartvigsen and [Trout Unlimited attorney Drew] Peternell acknowledged Whitehead’s integral role in bringing the parties together and ultimately as moderator of the negotiations. “A big thanks to Sen. Whitehead,” Hartvigsen said. “Without him there, I can’t say that we would have come to an agreement, not that we didn’t want to.”

More Dry Gulch Reservoir coverage here and here.


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