Pueblo: The PBOWW is eyeing a water rate increase of 2.75% in their new budget

From The Pueblo Chieftain (Chris Woodka):

While you were dumping all that water on the lawn last summer, you were keeping your water rates down. The Pueblo Board of Water Works got a detailed look at the proposed 2013 budget Tuesday, with no major surprises in the picture. A public hearing will be Nov. 20.

This year’s dry, hot weather meant a lower-than-expected increase in next year’s water rates — a 2.75 percent increase.
Why? Metered sales were projected to bring in $22 million, but all the extra watering meant an additional $800,000 in projected revenue. “Any time we have a situation where expenditures are lower or revenue higher, our customers get a benefit,” said Seth Clayton, director of administrative services and finance.

The water board also will see revenue of $7.6 million — in a $32.3 million budget — from water leases next year, including $5.2 million to power companies. While spot leases are not expected, the water board has several long-term contracts that provide additional revenues.

Expenditures are expected to be relatively flat, as opposed to this year’s steep hike in electric rates. Electricity purchases amount to about $3.4 million. A 1.49 percent salary increase is included, along with a 1.25 percent hike in health insurance and 5 percent drop in dental insurance.

An end to the drought could hurt next year’s revenues, which are based on consumption of 8.35 billion gallons for residential use. Outside lawn watering is the biggest variable for revenues, Clayton said. “Our customers are using their water wisely,” he said. “If we see a normal year, we will not see the consumption we have this year.”

More Pueblo Board of Water Works coverage here and here.

The Pueblo Board of Water Works is still actively trying to score shares on the Bessemer Ditch

From The Pueblo Chieftain (Chris Woodka):

Since 2009, the Pueblo water board has spent $59 million to purchase 5,541 shares, roughly 28 percent, of the Bessemer Ditch. The water board bought farms in 2010-11, but needed funds to pay for electric rate hikes in 2012. The board also wanted to hold the line on water rates “We still have an interest in purchasing shares and I’m sure there is interest in selling,” Hamel said. “But we did not budget any money to buy shares this year.”

The water board anticipates spending another $1 million for a change case in Division 2 Water Court, which most likely would be filed in 2013. The change would allow water to be moved from the ditch into the city’s water system. Contracts for the sales allow the water to remain in use on farms for the next 20 years. The change case will cover only those farms purchased by the water board, and will not apply to other water users along the ditch, Hamel said.

More Arkansas River basin coverage here.

Two Rivers Water Company has inked a purchase contract for a farm on the Bessemer Ditch

Here’s the release from Two Rivers Water Company via PR Newswire:

Two Rivers Water Company announced today it has entered into an agreement to acquire the operating assets of Dionisio Produce & Farms, LLC, including 150 acres of high yield irrigated farmland and 150 shares in the Bessemer Mutual Ditch Company, a senior water right on the main stem of the Arkansas River. Dionisio Produce & Farms has been producing vegetable crops in Pueblo County, Colorado since the 1930s.

Two Rivers will also lease approximately 170 additional acres of farmland and purchase farm equipment, essentially merging the former operations of Dionisio Produce & Farms into Two Rivers’ farming subsidiary. Russ Dionisio, the third generation owner/operator, will join Two Rivers and continue to manage the farming operations on the acquired and leased land. Two Rivers intends to operate the acquired assets under the Dionisio name, one of the most respected growers under the Bessemer Ditch with well-established produce marketing relationships.

John McKowen, Two Rivers’ CEO, commented, “Acquiring Dionisio Produce & Farms is an important strategic transaction for our company for several reasons. First, Dionisio is a trusted grower of fruits and vegetables for human consumption, which are a higher value agricultural category that compliments the Company’s existing livestock fodder crops. Second, this acquisition brings membership in the Bessemer Ditch, which takes its water by direct diversion from the Arkansas River. Finally, Russ Dionisio’s experience, reputation and proven skill in growing and marketing high value crops add substantially to our farming knowhow.”

The acquisition, which is subject to on-going due diligence, is expected to close by July 31, 2012. Two Rivers has advanced $400,000 into escrow to support Dionisio farming operations during the current growing season. The financial terms of the transaction were not disclosed, but the Company expects to arrange bank financing for a portion of the acquisition.

Russ Dionisio said, “I am proud of the Dionisio farming tradition in the Arkansas River Valley and pleased to join Two Rivers to help carry on our business. By joining Two Rivers, I will be able to concentrate on farming, the part of the business I love, and rely on the Company’s skilled business managers to handle the finance, insurance and compliance aspects of our integrated enterprise. Two Rivers has demonstrated the skill, capacity and perseverance to redevelop both farmland and water infrastructure to support productive agriculture in Huerfano and Pueblo Counties. I am eager to integrate Dionisio into this dynamic organization.”

As noted, the acquisition includes shares in the Bessemer Mutual Ditch Company. The Company’s President, Gary Barber, noted, “The productive integration of fertile land and reliable water under the Bessemer Ditch is a model the Company is trying to emulate as we build out our farm and water assets on the Huerfano and Cucharas Rivers system. When we finish refurbishing our upstream reservoirs and integrate a drought-proof groundwater component to our system, we expect to replicate the level of water reliability of the Bessemer Ditch that has sustained the Dionisios for more than 60 years, through all hydrological and weather cycles. By integrating the Dionisio business into our own, Two Rivers will gain not only a new source of farm revenue but also experience in growing and marketing the higher value crops that are the long-term future of our Company. This acquisition supports both our existing and our planned water rights and infrastructure, allowing us to manage our resources in conjunction with the Bessemer system.”

More coverage from Chris Woodka writing for The Pueblo Chieftain. From the article:

A water development company that plans to restore agricultural ground in Pueblo and Huerfano counties is purchasing a farm on the Bessemer Ditch…

The acquisition will be added to the 4,700 acres Two Rivers already owns in southeastern Pueblo County and Huerfano County. The company has purchased nearly all of the Huerfano-Cucharas ditch, Cucharas Reservoir and the Orlando Reservoir system. The Bessemer Ditch water rights will allow the company to add fruits and vegetable crops to the forage crops it is growing on the other acreage, McKowen said. It also gives the company a direct water right on the Arkansas River, part of the long-term strategy for finding water to fill Cucharas Reservoir…

The purchase of Bessemer shares is the latest in transfers that are changing the nature of the Bessemer Ditch. For years, the ditch was a collection of relatively small farming operations. Pueblo County’s largest ditch flows through Pueblo and irrigates about 20,000 acres, mostly east of Pueblo. It receives its water directly from Pueblo Dam. The Pueblo water board has purchased about 28 percent of water rights on the ditch since 2009 for $10,150 a share, and continues to make purchases. All of its contracts include allowing the farmers to use the water for irrigation for 20 years. The St. Charles Mesa Water District has purchased about 10 percent of the Bessemer Ditch over the years for domestic water service on the St. Charles Mesa.

More Bessemer Ditch coverage here and here.

Pueblo: The city’s raw water supplies are sufficient to cover anticipated growth

From The Pueblo Chieftain (Chris Woodka):

Pueblo’s advantage is that it has not grown into its existing supply, unlike many other Front Range communities. While storage is the key to ongoing statewide strategies, few new projects have been built since the completion of Lake Pueblo in the 1970s. The Preferred Storage Options Plan, which would look at enlarging Lake Pueblo, is 14 years old and “still at Step 1,” [Executive Director Alan Hamel] said. The water board bought 28 percent Bessemer Ditch in 2009 as a way to reduce dependence on Colorado River water, but half of Pueblo’s supply still comes from the Western Slope. It will be at least 10 years before the Bessemer shares are converted to municipal use in water court, Hamel said. At the same time, Pueblo water customers have voluntarily cut their use 17 percent and the water board is looking at other strategies for conservation…

The water board is pricing water service rates to new large users at the true cost of providing water — $16,200 per acre-foot. As it has developed the policy, staff members have worked behind the scenes with city staff and met with the Pueblo Economic Development Corp. to make sure the rates don’t scare off companies that could bring jobs to Pueblo, Hamel said.

More Pueblo Board of Water Works coverage here.

The Pueblo Board of Water Works board approves over $1 million in water sales this season

From The Pueblo Chieftain (Chris Woodka):

The board agreed to sell nearly 14,000 acre-feet of water to eight water users in one-year lease agreements for surplus water. The sales do not affect water rights. The board also gets about $6.8 million for 21,000 acre-feet of water in long-term leases.

Rates ranged from $67.55-$150 per acre-foot, with an average of $74 per acre-foot. Most of the water is going to irrigated agriculture. Rates are about 60 percent higher than recent years because of dry weather and high prices for agricultural commodities, said Alan Ward, water resources manager. Three well augmentation groups in the Arkansas Valley will purchase 7,250 acre-feet for about $556,000, while the Bessemer Ditch will buy 6,000 acre-feet for $405,000. There were bids for 53,696 acre-feet of water.

Meanwhile, the board named the new director to take over for Alan Hamel who is retiring. Here’s a report from Chris Woodka writing for The Pueblo Chieftain. From the article:

Terry Book, 60, will take the helm of the Pueblo Board of Water Works in August, the latest step in a 33-year career that has lasted longer than he first imagined…The training period starts May 23, and Book will become executive director Aug. 30…

When Hamel became executive director in 1982, he offered Book a job as a division manager. Book stayed on, rising to his present job as deputy executive director…

“I appreciate the opportunity and the confidence the board has shown in me,” Book said. “Alan has been a mentor to me, and he has set a high standard I will try to live up to.”

More Pueblo Board of Water Works coverage here and here.

The Arkansas Valley Super Ditch engineering report forecasts the need for an additional 50,000 acre-feet in the valley by 2050

From The Pueblo Chieftain (Chris Woodka):

The conclusion is reached in an engineering report by Heath Kuntz prepared as part of the Super Ditch exchange case filed by the Lower Arkansas Valley Water Conservancy District in 2010.

The exchanges involve up to 58,000 acre-feet of water, 30,000 acres of ground, 82 exchange sites and seven ditch companies. So far, there has been no filing for a change of use of the water. Without a water leasing program like Super Ditch in place, there is the potential to permanently sell more farm water and take away flexibility to use the best farmland to grow crops, said Jay Winner, general manager of the Lower Ark district.

“Without the Super Ditch, I can see the day when the Ark Valley turns the clock back to the 1950s and we’re reduced to furrow irrigation,” Winner said. “In fact, I think the demand for water might be even higher than this report indicates.”

With the advent of surface-irrigation improvement rules in 2009, more replacement water will be needed as more systems in the valley are converted…

Well plans administered by three major groups now use about 24,500 acre-feet of leased water, and the engineering report projects that would increase to 30,500 acre-feet of water by 2050. In addition, the Arkansas Valley Conduit is expected to be constructed in the next decade, and its water demands will include 3,100 acre-feet from new sources to serve about 40 communities east of Pueblo. “The total projected demands associated with these operations are approximately 53,300 acre-feet per year in 2050,” Kuntz said in the report…

At its January meeting, the Lower Ark board heard from well associations that its lease of water from the Pueblo Board of Water Works, to help surface irrigators fill replacement needs, is raising the price others have to pay for augmentation water. The Pueblo water board typically sells water to bidders each year when the water is available. The price has been creeping up, as witnessed by the Fort Lyon Canal’s bid of $40 per acre-foot — twice its typical offer — in 2011. But the well groups argue that the $200 per acre-foot in the Lower Ark’s five-year contract takes water out of the pool available to them.

More Arkansas River basin coverage here.

IBCC: The Pueblo Board of Water Works hopes to sustain agriculture on the Bessemer ditch after converting shares to municipal use

From The Pueblo Chieftain (Chris Woodka):

“We included a 20-year lease-back so we could work on other options to sustain agriculture,” Alan Hamel, executive director of the Pueblo water board, told a state Interbasin Compact Committee group earlier this week…

The IBCC subcommittee is looking at alternative agriculture transfers. The group met in Denver with the Front Range Water Council, which includes the state’s largest municipal water providers, and the Colorado Agricultural Water Alliance, which encompasses the state’s major agricultural associations.

The Pueblo water board now owns 28 percent of the Bessemer Ditch, about 5,400 shares. The ditch is the largest in Pueblo County, and a major factor in the local economy. Other cities also are looking at maintaining the viability of agriculture in their neighboring communities.
“People in the cities are figuring out that they also need to eat,” said Jay Winner, general manager of the Lower Arkansas Valley Water Conservancy District…

“We have to make sure that agriculture doesn’t become a sharecropper,” said T. Wright Dickinson, a Moffat County rancher. “We could be entering a time where agriculture could out-compete the cities in terms of the economic value of water.”

Cities also have concerns about sharing the water. “I can’t make any long-term decision and a big investment up-front knowing that all I’ve got is a five-year water supply,” said Mark Pifher, director of Aurora Water.

Meanwhile the Two Rivers Water Co. is busy buying up agricultural land and shares in the Arkansas River basin. Here’s a report from the Associated Press via The Columbus Republic:

Two Rivers Water Co. says it has finished raising $5.25 million, allowing it to close on its purchase of 2,500 acres of irrigated farmland in Huerfano and Pueblo counties…

Two Rivers bought 91 percent of the Huerfano Cucharas Irrigation Co. last year and added the Orlando Reservoir to its water rights portfolio in February. It says will be able to store more than 70,000 acre-feet of water when its reservoirs and canals systems are fully restored.

More IBCC — basin roundtables coverage here. More Front Range Water Council coverage here.

The Pueblo Board of Water Works water rights have best yield in five years

From The Pueblo Chieftain (Chris Woodka):

A new report by the water resources department of the water board shows the yield from all sources in 2010 was 86,291 acre-feet, up slightly from yields in the previous three years. In 2006, yields were 89,137 acre-feet. It’s surprising because 2008 was the best recent year for snowpack. The water board didn’t fully take advantage of the conditions then because its reservoirs were relatively full. “I think the difference is that we didn’t take any Fryingpan-Arkansas Project water in 2008,” said Alan Ward, water resources administrator for the Pueblo water board. “You always have to walk that line between having enough and, I guess you’d call it, gluttony.”[...]

Still, 2010 was a banner year for direct-flow water rights in the Arkansas River basin, because a heavy runoff at the right time allowed the water board to capture more water than it otherwise would have. About 60,310 acre-feet, or 70 percent of the total, came from within the Arkansas River basin in 2010. That was the most in a decade from native sources. “The key reason was that for several days we got to store water in Clear Creek Reservoir because all of the downstream rights were satisfied,” Ward said.

More Pueblo Board of Water Works coverage here.

Pueblo Board of Water Works: Shoring up supply

Here’s a look at current municipal water supply planning from Chris Woodka writing for The Pueblo Chieftain. Click through and read the whole thing, it’s a nice synopsis up and down the Front Range and Arkansas Valley. Here’s an excerpt:

“I think it was my most embarrassing moment professionally. I used to say we were drought-proof,” said Alan Hamel, executive director of the Pueblo Board of Water Works. “Now we were in the middle of a 350-year drought; 2002 was a wake-up call.”

The water board had a drought plan at the time, based on records that went back to 1874, when it was formed. “Bud (O’Hara) and Alan (Ward) came into my office, but called first and asked me if I was sitting down,” Hamel recalled, talking about a meeting in 2002 with his water resources staff. ”They said our 1874 rights were about to be called out. I asked, ‘For how many days?’ They said, ‘At least six weeks.’ It was a good thing we were sitting down.”

After 2002 and the relatively dry years that followed, the Pueblo water board adopted a new strategy, planning for 100 years down the road. Immediately, the board doubled the amount of water it keeps in storage, and has since increased the amount in order to supply area power plants. Then, it went looking for new water rights, and found them in 2009, when it completed the purchase of more than a quarter of the Bessemer Ditch, Pueblo County’s largest irrigation canal.

More Pueblo Board of Water Works coverage here and here.

The Pueblo Board of Water Works is still in the hunt for shares of the Bessemer Ditch



From The Pueblo Chieftain (Chris Woodka):

A new plan, which will be presented at a budget hearing 2 p.m. Tuesday, includes $1.5 million for new Bessemer shares, as well as $550,000 from the water development fund to pay for legal, engineering and capital costs associated with the transfer of the shares. The purchase of Bessemer shares is part of a long-term plan to reduce Pueblo’s dependence on water imports from the Western Slope. Water probably won’t be needed for years to come, so nearly all of the Bessemer contracts include a provision that leases the water back to farmers for the next 20 years.

More Bessemer Ditch coverage here and here.

Pueblo: The Pueblo Board of Water Works is considering a five percent rate hike

From The Pueblo Chieftain (Chris Woodka):

Water board employees anticipate the 5 percent increase in 2011 largely to cover increased utility costs, which are expected to rise 22 percent to $2.57 million. Other large areas of expenditures include $1.26 million for outside services, up 8 percent; $1.3 million for repairs and maintenance, level; $1.24 million for supplies, level; $1.6 million for new main extension projects; and $870,000 to continue converting meters to an automated reading system. A rehabilitation of the outside and inside of the Hellbeck water tank will cost $400,000. Without using water development money, a rate increase of 8 percent is estimated…

Metered water sales are the largest source of revenue for the water board, and are expected to be about $19.5 million — 3.5 percent below budget — for 2010. Customers continue to use less water as part of a continuing conservation trend. In 2011, $20.5 million in metered sales is projected. The board also is anticipating more than $7.5 million in contract water sales in 2011, including $4.9 million to Xcel’s Comanche plants, $1.58 million from a pair of contracts with Aurora, $812,000 from raw water sales and $360,000 from the Black Hills contract. The budget workshop is scheduled at noon Nov. 9 and the hearing at 2 p.m. Nov. 16 at the Board of Water Works, 319 W. Fourth St.

More Pueblo Board of water works coverage here.

Arkansas River Basin: The Pueblo Board of Water Works closes on nearly 27% of Bessemer Ditch water rights

From The Pueblo Chieftain (Chris Woodka):

“Right now, financially, we’ve acquired what we’re comfortable with to meet our needs for the next 30-40 years,” said Alan Hamel, executive director of the Pueblo water board. “I don’t see any more major purchases in the next seven or eight years.” Still, the water board is acquiring a few more shares. This year, the board budgeted $3 million to purchase another 300 shares. In 2009, the board bought about 5,300 of the 20,000 shares on the Bessemer Ditch…

The board’s offer to allow farmers to lease water back for 20 years was so popular — 97 percent took the deal — that it was difficult to find land to revegetate this year, so that program was delayed. The board has completed engineering for three measurement and control stations, and plans to build them when the ditch is dry, during winter water storage from Nov. 15-March 15. The estimated cost is $250,000-$300,000. “The structures will allow the Bessemer to control local flooding, protect the ditch and improve the efficiency of running water in the ditch,” Hamel said.

The board also is working with one landowner to set up a lease-fallowing program, where the landowner would keep one-third of his water and irrigate a different portion of the farm each year. That way, none of the land would be permanently removed from production, Hamel said. “It has the potential to serve as a model for future shares, or possibly for some we have already purchased,” Hamel said…

In the next year, more engineering work is planned. A change case, which would allow other uses for water now decreed agricultural, will not be filed until late 2011 at the earliest, Hamel said…

“My concern is that we’re headed down the road where they buy more water to the point where there is nothing left to support agriculture,” said Mike Bartolo, a Bessemer shareholder who manages the Colorado State University Agricultural Research Center at Rocky Ford. Bartolo was a vocal opponent of last year’s change in the bylaws of the ditch that make it possible to use the water outside the area historically irrigated by the Bessemer Ditch. The vote, 2-1 in favor of changes suggested by the Pueblo water board, cleared the way for the sale. “The municipal interests can’t see beyond the end of their spreadsheets,” Bartolo said. “They are exterminating the best farm ground in the state.” Bartolo has seen the effects of ditch sales from the Rocky Ford Ditch, now almost completely owned by Aurora, except for the research center and other holdouts. A 20-year agreement to lease back to farmers only delays the demise of agriculture, he said.

Leonard DiTomaso, who opposed the water works’ bid to change the bylaws and briefly served on the Bessemer board as an opponent of the sale, said the only regrets he hears are from others who would like to sell.
“There are more who would sell if they could,” DiTomaso said. “The larger ones are those who had the opportunity, but it’s really a matter of time before someone else comes in with an offer.”

More Arkansas River Basin coverage here.

Gary Barber: ‘[SDS] infrastructure to deliver water needs to support a regional solution’

From The Pueblo Chieftain (Chris Woodka):

“The infrastructure to deliver water needs to support a regional solution and the funding must be equitable,” Gary Barber, chairman of the roundtable, said in comments accompanying an official report to the state. “Otherwise, the Arkansas Basin may not be able to meet the gap, and the consequences will be felt beyond the borders of El Paso County.”

The largest portion of a statewide gap in future water supply is 22,600 acre-feet needed to supply communities outside Colorado Springs in El Paso County, according to the needs assessment included in the report. About 40 percent of that will be new demand, while 60 percent is loss of existing water supplies as pumping increases in the Denver Basin aquifers. As roundtable president, Barber pushed for completion of the reports, “Projects and Methods to Meet the Needs of the Arkansas Basin.” The document includes consumptive and nonconsumptive needs studies and represents the consensus of the roundtable’s first four years of meetings. It also begins to rate the relative importance of projects in meeting the state “gap” in water supply identified in 2004 by the Colorado Water Conservation board. It places the highest priority on sustainable projects. The ideas included in the report are rated on three questions: Is it viable? Is it equitable? Is is bearable?…

Every member of the roundtable represents a constituency – special interests – and Barber’s are his clients in El Paso County, which include two water authorities whose members are hunting for future water supplies. Three of them have purchased ranches for water rights in the past three years, one is trying to buy rights on two valley canals and collectively, they unsuccessfully tried to buy control of the Bessemer Ditch in 2008…

Barber’s comments about SDS reflect years of frustration over including other areas of El Paso County besides Colorado Springs, Security and Fountain in the $1 billion-plus project. He has frequently been outspoken on the need for regionalism…

A study by the Pikes Peak Regional Water Authority concluded it would cost at least $1 billion to build its own pipeline from the lower Arkansas Valley…

Colorado Springs City Council, sitting as the utilities board, has discussed including other El Paso County users as customers of SDS and the possibility of using it as a regional delivery system. No formal decisions on that concept have been made, however.

More Southern Delivery System coverage here and here.

Pueblo Board of Water Works closes most of the deals for Bessemer Ditch shares

From The Pueblo Chieftain (Chris Woodka):

The water board has purchased more than a quarter of the Bessemer Ditch, although some contracts have been extended beyond today’s deadline. The board has spent more than $53 million so far, including $30.45 million from the sale of the Columbine Ditch to Aurora and Climax Mines and $23.37 million in revenue bonds. The board expects to spend $60 million on the ditch shares, using money from its water development fund – from outside water sales, also called leases – to make up the difference. Pueblo water rates are expected to be hiked 5 percent, with 3.5 percent going to refinance the bonds. The final rate will be set at a Nov. 17 budget hearing. As of Thursday, the board had wrapped up 62 purchases totaling more than 5,220 Bessemer Ditch shares, said Executive Director Alan Hamel. The board paid $10,150 per share. Four contracts for about 100 shares were extended to give the board and sellers time to work out details, Hamel said…

Every contract came with an option to lease the shares back from the water board for the cost of ditch assessments for up to 20 years. Hamel told shareholders in May that the water board probably won’t need the water for another 20-30 years, barring a severe drought. Water from 84 acres of the total will not be leased back, giving the board an opportunity to test conditions in Pueblo County for revegetation – something that will have to be done on all the farms in the purchase eventually. “In 2010, we will begin to put together a revegetation plan,” Hamel said. “Aurora has done a lot of work on its farms down in Rocky Ford, but conditions here aren’t necessarily the same.” At any time during the 20 years, irrigators can choose not to lease the water. In that case, the shares could still be used within the lateral or the ditch as a whole…

The water board still must take the shares to court to change them to municipal and other uses before it can directly use the water. The change case should be filed within 18 months to two years, Hamel said. “We still have engineering work to do, and we’re looking at a Pueblo County 1041 application,” Hamel explained. It won’t be the first time a change case has been filed on Bessemer shares. The St. Charles Mesa Water District has purchased about 2,000 shares, 10 percent of the ditch, and is converting them at this time. Its service area lies mostly within the Bessemer Ditch boundaries…

The board expects to net about 1.5 acre-feet per share – about 8,000 acre-feet total – based on the average annual historic use for crops. That number will be refined by engineering reports on each property…

The Bessemer Ditch was started in 1873 as a town ditch for South Pueblo. It was owned for a time by Colorado Coal & Iron, but incorporated as a shareholder-owned mutual ditch company in 1894. About 43 miles long, it irrigates nearly 20,000 acres, mostly east of Pueblo, although there are couple laterals west of the city. All of the water board’s purchases are east of Pueblo, Hamel said. The Bessemer Ditch has water rights dating back to 1861, and diverts its water directly from Pueblo Dam. It also has some storage rights in Lake Pueblo through the winter water program.

More Bessemer Ditch coverage here and here.

Pueblo Board of Water Works to raise water rates?

From The Pueblo Chieftain (Chris Woodka):

The Pueblo Board of Water Works is looking at a 5 percent increase in water rates in its 2010 budget, and Tuesday set dates for a workshop and public hearing. The increase in the $32.5 million budget includes a 3.2 percent increase approved in August in relation to the $23.37 million bond issue for purchase of shares of the Bessemer Ditch. The increase is about half of projections as high as 10 percent which were foreseen last summer. A workshop will be at noon Nov. 5, and the public hearing at 2 p.m. Nov. 17 at the water board offices, 319 W. Fourth St.

More PBOWW coverage here and here.

PBOW halfway through Bessemer Ditch water rights acquisition

From The Pueblo Chieftain (Chris Woodka):

The water board has closed 33 of 66 contracts for 5,330 shares, about one-quarter of the Bessemer Ditch. It will spend about $60 million in the purchases. The closings do not represent half of the water, since some of the larger blocks will be closed later Hamel said. All of the closings are expected to be completed by the end of the month.

More Bessemer Ditch coverage here and here.

Pueblo Board of Water Works clears the way for Bessemer Ditch share buy

From The Pueblo Chieftain (Chris Woodka):

The two resolutions clear up the relationship of the new debt to past and future obligations and give the board’s representatives flexibility in issuing the bonds next month. The board will issue up to $27 million in bonds for up to 5.5 percent interest, depending on several factors still undecided. The actual amount of the bonds is expected to be closer to $23 million at 4 percent interest when the bonds are issued on Oct. 22…

The board also is waiting to learn what portion of the bonds will be issued as Build America Bonds, part of the federal stimulus package, which could also reduce the financial impact and what level of bond insurance is needed. Market conditions also have to be taken into account.

More PBOWW coverage here and here.

Pueblo Board of Water Works to mull financing alternatives for Bessemer Ditch shares

From The Pueblo Chieftain (Chris Woodka):

The resolutions Tuesday will set the terms under which the bonds will be sold and authorize the issuance of the bonds. The resolution on terms also sets forth how other debt, present or future, would fit into the structure of the bonds. Bonds would be issued Oct. 22. The bonds would be sold during October, paralleling the time frame for the board to finalize its contracts with 67 shareholders for 5,339 shares on the Bessemer Ditch Ñ a little more than one-quarter of the total. “We did two of the contracts on the Bessemer Ditch, as pilots, to make sure everything was worked out,” said Alan Hamel, executive director. “We wanted to make sure our process was going to work, and there weren’t any problems.” The water board wants to complete all of the contracts by Oct. 30. Closing on the contracts will be coordinated to the flow of money used to buy the shares.

More PBOWW coverage here.

Arkansas Valley: St. Charles Mesa Water District change case(s) update

From The Pueblo Chieftain (Chris Woodka):

The St. Charles Mesa Water District is trying to bring water rights it obtained in the last five years under the same requirements for use as ditch shares changed in a 2004 case. The new case on 180 shares of Bessemer Ditch was filed in late June in Division 2 Water Court. The recently settled 2004 case applied to 1,877 shares of Bessemer Ditch previously acquired by the district. All told, St. Charles owns a little more than 10 percent of the Bessemer Ditch and serves 4,048 customers in the same general area historically irrigated by the ditch.

More Bessemer Ditch coverage here and here.

Pueblo Board of Water Works board meeting recap

The PBOWW finished up the sale of the Columbine Ditch and approved a 3.2 percent rate hike this week. Here’s a report from Chris Woodka writing for The Pueblo Chieftain. From the article:

The 3.2-percent rate hike will raise a little more than $1 million to pay debt service on $23 million in bonds, said Seth Clayton, finance division manager. “We will be coming back in November for another increase to cover our normal operations,” Clayton told the board. Clayton estimated the total increase for 2010 would be about 8 to 9 percent, with another 6 to 8 percent in 2011. That’s lower than initial projections of 10 percent each year…

“Nobody in the community is in favor of a rate increase,” President Nick Gradisar said. “But the people I talk to are in favor of what we are doing on the Bessemer.” The bonds would be issued Oct. 22…

The Columbine sale would close Sept. 21. Columbine Ditch is on Fremont Pass 13 miles north of Leadville and brings water to the Arkansas River from the Eagle River basin. Climax needs the water because it lost a water court claim to Denver Water and plans to expand in the future, said Bud O’Hara, water resources division manager. The agreement also would keep Aurora from objecting in the eventual change of use case for the Bessemer Ditch shares, and would also take the Pueblo water board out of the change of diversion case associated with the Columbine. The Columbine water already is available for all uses under the water board’s decree, so it will not require a change of use decree…

The water board is now looking at 67 contracts for a total of 5,339 shares at $10,150 each, with another 10.5 shares pending on the Bessemer Ditch, Hamel said. There are about 20,000 shares on the ditch. The water board plans to spend about $60 million, and will begin closing contracts in September using funds already in the water development fund and from lease revenue.

More Pueblo Board of Water Works coverage here and here.

Pueblo Board of Water Works to consider raising rates

From The Pueblo Chieftain (Chris Woodka):

The Pueblo Board of Water Works will meet next week and is expected to act on a staff recommendation to raise water rates 3.2 percent next year in order to provide $1.05 million in debt service for bonds to help pay for shares of the Bessemer Ditch. The 3.2 percent increase would amount to about 96 cents per month for the average customer with a 1-inch residential tap. The board meets at 2 p.m. Tuesday in the board room at 319 W. Fourth St.

More Pueblo Board of Water Works coverage here.

Pueblo Board of Water Works approves Aurora’s purchase of Columbine Ditch

From The Pueblo Chieftain (Chris Woodka):

Aurora will pay the Pueblo water board $30.48 million for the ditch, located on Fremont Pass 13 miles north of Leadville. The water board will use the money from the sale as part of a $60 million package to buy 5,200 Bessemer Ditch shares, about one-fourth of the total. “This action is critical,” said Tom Autobee, a member of the water board. “It allows us to buy a water right in our backyard in exchange for a transmountain right that’s not reliable.” Without the sale of the ditch, Pueblo water rates would have to increase 25 percent in two years beyond the rate increases currently being considered, said Executive Director Alan Hamel.

More Coyote Gulch Columbine Ditch coverage here and here.

Runoff (storage) news: Pueblo Board of Water Works has a record amount of storage for the year

From The Pueblo Chieftain (Chris Woodka):

The water board has about 50,000 acre-feet of water in storage now, nearly a two-year supply of potable water for the city. The water board supplies about 28,000 acre-feet annually for potable use, or about 9 billion gallons. However, much of the water in storage is needed to fulfill contracts for outside water sales and would be needed for the future growth of the city, Ward said. “If we get below 16,500 acre-feet in storage, then we start thinking about water restrictions,” [Alan Ward, water resources administrator for the Pueblo Board of Water Works] said. “Right now, that would take several years of severe drought. Our target is twice the minimum, or about 33,000 acre-feet. We’re in a position where we can do that, but we wouldn’t have that luxury in the future because we don’t have the storage.”[...]

Right now, Pueblo has about 66,000 acre-feet capacity in storage accounts in four reservoirs. That number could increase by another 9,000 acre-feet by 2025 under a federal contract to use excess capacity at Lake Pueblo. The water board also has filed an application in Division 2 Water Court to triple the size of its Clear Creek Reservoir in northern Chaffee County and has been among those pushing for a study on the enlargement of Lake Pueblo. Pueblo supplies Comanche Power Plant with about 8,000 acre-feet of water annually, and the water board is obligated to provide another 5,000 acre-feet annually for the third unit under a 2005 contract. Pueblo also sells about 5,000 acre-feet of water annually to Aurora, under a lease agreement that can be suspended during a drought, as it was in 2002…

The water supply this year is swollen for several reasons, Ward said. The largest factor is boosting the amount in storage to supply Comanche. The water board also benefitted from a healthy spring runoff – Twin Lakes brought over 120 percent of average. The volume of the runoff surprised everyone and was bolstered by frequent storm systems during June. Finally, farmers who are leasing water from the Pueblo water board are delaying when they take the water, leaving it in storage longer.

Meanwhile the Pueblo City Council has approved the board’s sale of the Columbine Ditch to Aurora. Here’s a report from Chris Woodka writing for The Pueblo Chieftain. From the article:

The Columbine Ditch is located 13 miles north of Leadville on Fremont Pass and brings over water from the Eagle River basin. Council’s approval was the last piece needed for the sale, which already has been approved by the Aurora City Council and Climax. Money from the sale will help buy shares on the Bessemer Ditch. Mike Occhiato and Ray Aguilera voted against the sale at Monday’s City Council meeting, saying the water board should look for better alternatives in purchasing Bessemer shares. “Anytime I hear the word Aurora with the sale of water, it makes the back of my hair curl,” Aguilera said. “Anytime you sell water to Aurora from this basin, it doesn’t wash with me.”

The $30.48 million from the sale should be received in the near future, but details are still being worked out. The money from the sale will go toward $60 million the water board needs to complete its purchase of 5,200 shares of the Bessemer Ditch, about 25 percent of the total. The water board may not need the water for at least 20 years, and has agreed to lease water back to farmers for the cost of assessments during that time. It also has agreed to lease excess water from the sale to Pueblo County interests first and not to lease the water outside the Arkansas River basin. Other shareholders in the Bessemer Ditch would not be restricted from selling their shares to users outside the Arkansas Valley under changes in the Bessemer Ditch bylaws approved in May. However, Aurora – the only outside water provider that currently has the ability to move water out of the Arkansas Valley – is restricted from obtaining new water rights in the valley under several intergovernmental agreements. Last week, the water board entered financial contracts to issue $22 million in bonds to help finance the deal. The rest of the money would come from the water development fund and new long-term lease agreements for outside water sales. The water board is expected to discuss the amount of rate hike needed to finance the bonds at its Aug. 25 meeting and is looking for ways to minimize the increase in water rates.

More Coyote Gulch PBOWW coverage here and here.

Aurora (along with the Climax molybdenum mine) to buy Columbine Ditch

From The Pueblo Chieftain (Chris Woodka):

Aurora City Council Monday gave the green light for the deal, which would match an offer of $30.48 million from Ginn Development for a private ski resort at Minturn. The council’s action was final because a waiver of reconsideration was included in the initial motion. Pueblo City Council Monday approved the sale on first reading, a requirement under the city charter any time an asset is sold. Council’s final approval will be on the July 27 agenda.

Aurora was able to match the offer because of a clause in a 1997 lease agreement with the Pueblo water board that gave it a right of first refusal if Pueblo sold any of its transmountain water rights. The contract specifies that only water brought into the Arkansas Valley from the Western Slope can be used in the Aurora leases. “Aurora’s concern was that if we sold any of our assets we would not have the ability to supply water for the lease,” said Alan Hamel, executive director of the Pueblo water board. “At the time we had no plans to sell any assets.”[...]

Aurora and Climax formed a partnership called the Fremont Pass Ditch Co., with Aurora controlling two-thirds of the company and holding an option to buy the entire Columbine Ditch in the future, said spokesman Greg Baker. Aurora earlier bid $30.5 million on the Columbine, but wanted to spread out payments over five years. The city reallocated its resources to offer the full amount this year, as Ginn Development had in its bid. “This is high-quality mountain water, and you don’t see that for sale too often,” Baker said. “The fact that it comes into the basin above Twin Lakes makes it perfect for us.” Since the Arkansas River does not flow directly into Twin Lakes – where Aurora removes water from the Arkansas Valley through the Otero Pipeline and Pumping Station – Aurora would have to exchange water from the Columbine Ditch into its accounts. But the exchange opportunities are greater near the headwaters and Aurora has other ways to use the water in the Arkansas Valley, Baker said.

Climax mine, owned by Freeport-McMoRan Copper & Gold Inc., is located on Fremont Pass and could use the water directly. Last year, the company said it is still revamping the mine with the intention of reopening, but timing could be delayed by a weak economy.

More Coyote Gulch coverage here and here.

Pueblo Board of Water Works is trying to work out the details to finance Bessemer Ditch water rights acquisitions

From The Pueblo Chieftain (Dennis Darrow):

Nick Gradisar [board chair], addressing the Greater Pueblo Chamber of Commerce’s monthly luncheon at the Pueblo Convention Center, said the utility is considering a combination of rate hikes, outside water leases and the sale of Pueblo’s interest in the Columbine Ditch on the Western Slope. The increase in local water rates could amount to 10 percent a year for two years, Gradisar said. The extra revenue would go toward repaying a $22 million bond issue the utility is considering as the last piece needed to finance the deal.

The water board recognizes the hardship an overall 20 percent rate hike could cause on low- and fixed-income homeowners in particular, Gradisar said. To further emphasize his point, he shared census statistics about Pueblo’s high poverty rates and low household income levels. Accordingly, the board welcomes public feedback on how to possibly limit the rate hikes, particularly for low-income people, Gradisar said. One idea he wants studied is a so-called “lifeline” discount rate that some utilities charge their poorest customers, Gradisar said…

Overall, though, the board views the rate hike is justified by the long-term value of the water the utility would acquire, Gradisar said. The deal would keep the Bessemer water at home, lessen the utility’s reliance on Western Slope water and aid the recruitment of businesses, Gradisar said. Also, local water rates are currently among the lowest in the state and other communities such as Colorado Springs are spending at even higher levels to strengthen their water resources for the next half-century, Gradisar said…

The rate hike would be in addition to the utility’s continued reliance on water leases and also the sale of the Columbine Ditch, Gradisar said. The ditch sale – either to the city of Aurora or, if that city declines, to a Minturn resort developer – is expected to generate about half of the needed money for the deal, or about $30 million cash, he said. On water leases, Gradisar said the lease program, including a lease deal with Aurora that is the target of criticism by some in Pueblo, currently makes up a significant portion – about 19 percent – of the utility’s current revenues. If not in place, local water rates would need to rise another 19 percent to keep the books balanced, he said. One Aurora lease that nets $550,000 a year is set to expire by 2011.

More Coyote Gulch coverage here and here.