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.
Pueblo Board of Water Works to raise water rates?
October 21, 2009
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.
PBOW halfway through Bessemer Ditch water rights acquisition
October 14, 2009
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.
Pueblo Board of Water Works clears the way for Bessemer Ditch share buy
September 23, 2009
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.
Pueblo Board of Water Works to mull financing alternatives for Bessemer Ditch shares
September 22, 2009
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
September 7, 2009
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.
Pueblo Board of Water Works board meeting recap
August 19, 2009
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.
Pueblo Board of Water Works to consider raising rates
August 15, 2009
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.
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.
Runoff (storage) news: Pueblo Board of Water Works has a record amount of storage for the year
July 29, 2009
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.
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.
Pueblo Board of Water Works is trying to work out the details to finance Bessemer Ditch water rights acquisitions
July 12, 2009
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.
Pueblo Board of Water Works: Bessemer Ditch sellers sorting out leases and purchase contracts
May 31, 2009
From The Pueblo Chieftain (Chris Woodka):
The Pueblo Board of Water Works has offered to lease back the water it is purchasing on the Bessemer Ditch for 20 years to all sellers. However, until the contracts are closed, probably in October, the water board has no way of knowing how many irrigators will take them up on it. “The early indications are that the overwhelming majority are going to lease back,” said Alan Ward, water resources administrator. “We won’t know until we close the contracts. It’s offered to every seller.” Sellers do not have to accept the 20-year deal, which provides water to those who sold for the cost of ditch assessments. Shareholders already are required to pay the assessments for the operation and upkeep of the ditch…
Excess water that is not leased back to shareholders would first be offered to other users on the Bessemer Ditch, then to others with a need in Pueblo County, according to an agreement the water board signed with the St. Charles Mesa Water District. The district owns about 2,000 shares and has put the same limits on itself. The water board also has committed to revegetating any land that is dried up in the sale. Recent water court cases in the Arkansas River basin, such as the Tri-State acquisition of nearly one-half of the Amity Canal, have placed responsibility for revegetation with the buyer of the water rights as well.
The Bessemer Ditch shareholders approved bylaw changes last week that paved the way for the Pueblo Board of Water Works to purchase shares to convert to municipal use for the long-term supply for the city. Now Pueblo has to get the change of use through water court. Here’s a report from Chris Woodka writing for the Pueblo Chieftain. From the article:
The Pueblo Board of Water Works expects to close contracts for its purchase of Bessemer Ditch shares in the next few weeks, but its work on converting the agricultural ditch water to municipal use is just beginning. “With the change in the Bessemer Ditch bylaws and articles of incorporation, we made one milestone. It’s ano-ther chapter in the novel,” Executive Director Alan Hamel told the board Tuesday. “We have a ways to go, but we made ano- ther step forward.”[...]
The purchase is part of a long-range water resources plan that will reduce Pueblo’s dependence on water imported from the Western Slope. The board Tuesday postponed action on another key piece of the equation: the sale of the Columbine Ditch. The board received a bid of $30.48 million from Ginn Development, which is developing the Battle Mountain Ski Resort near Minturn. “We’re still working on a very complex contract,” Hamel said. “This is something new to us, selling one of our assets. But we’re close and we’re optimistic we’ll have an agreement soon.” The water board could call a special board meeting in the near future to approve the Columbine contract. Even then, it would not be final, because Aurora would have 60 days to match the offer, under terms of an earlier agreement with the Pueblo water board.
Aurora is undecided about what it will do. “We haven’t seen the contract, so we don’t know what’s involved,” said Gerry Knapp, Aurora’s Arkansas Valley manager. “We will consider it, but we have made no decision.”
The Bessemer shares could yield up to 7,500 acre-feet, depending on what happens in water court. That will be a big concern of the water board as it works to close the sale, Hamel said. Hamel said financial, legal and engineering decisions will be needed before the sales are finalized by the end of this year. For two years after that, there will be legal action as the shares are taken through water court. After that, the water board will have ongoing responsibility for revegetation on the ditch.
Bessemer Ditch shareholders amend bylaws, greasing the gears for sales to Pueblo Board of Water Works (and others)
May 13, 2009
Here’s an article describing the mood at Monday’s Bessemer Ditch shareholders meeting, from Chris Woodka writing for the Pueblo Chieftain. From the article:
In the end, arguments in favor of future sales prevailed over the strong sentiment to preserve a rich agricultural history in Pueblo County. The final vote was, exactly, 12,047.592 shares in favor of selling to 6,471.554 against.
The meeting was tightly run, with former Judge Joe Ulibarri wielding a stern gavel and an outside accounting firm counting the votes. Ulibarri at one point shut down a speaker who had begun railing against sellers. A dozen people spoke, staying within the two-minute limits strictly enforced by Ulibarri. Some offered rebuttals, but there was little verbal animosity of the type that has occasionally flared on the mesa lately.
In order to close voting, accountants and lawyers had to offer assurances that the signed shares which were voted Monday would remain sealed and confidential unless there were a court order to do otherwise. Bessemer board members, some of whom are selling and some who opposed the rules to make the sale easier, were publicly silent. The board as a whole took no position for or against the change.
A policeman was standing watch…
Some facts about the pending sale of the Bessemer Ditch.
- The Pueblo Board of Water Works is buying about 5,000 of the 20,000 shares on the Bessemer Ditch at a price of $10,150 per share. It expects to spend more than $60 million to complete engineering, legal and revegetation work.
- The board has an agreement with the St. Charles Mesa Water District to use the shares it buys first in Bessemer Ditch, then in Pueblo County, as long as it can find users for the water.
- Many of the contracts have agreements to lease water back to farmers for 20 years. The water board does not expect to need the water until about 30 years from now.
- The changes in bylaws do not prohibit sales to others, anywhere in the state. Bessemer takes its water directly from Pueblo Dam, making it difficult for any out-of-basin user to benefit from the water. Aurora, the only out-of-basin user in the Arkansas Valley, cannot buy new shares under a 2003 agreement, but can buy water on a temporary basis through a lease. El Paso County users could use the Southern Delivery System – if it is built from Pueblo Dam – to move water, with proper permit approval, but no arrangements to do that now exist.
Bessemer Ditch shareholders approve bylaw changes paving way for sales to Pueblo Board of Water Works
May 12, 2009
Shareholders in the Bessemer ditch approved changes to the their bylaws which will grease the gears of potential sales — primarily to the Pueblo Board of Water Works. Pueblo is hoping to scale back their reliance on out of basin water. Here’s a report from Chris Woodka writing for the Pueblo Chieftain. From the article:
“Now we’ll start cleaning up and closing some contracts,” said Alan Hamel, executive director of the Pueblo water board. “We have some engineering to do, and we’ll be looking at the financing.”
The vote clears the way for the sale of the Columbine Ditch north of Leadville. Next week the water board will attempt to finalize the contract with Ginn Development, which has offered $30.48 million for the ditch for a new ski resort near Minturn. Aurora will have the opportunity to match the offer under a previous agreement.
The water board will spend more than $60 million on the purchase, including payments of $10,150 per share for 5,000 shares. More than 200 people showed up for Monday’s meeting at the Pueblo Convention Center, and about a dozen spoke passionately both in favor and against the bylaw changes.
“I didn’t think we’d get beaten this bad,” said Leonard DiTomaso, a Bessemer board member who organized a campaign to scuttle the rule changes. “I thought we’d win.” Other Bessemer board members at the meeting were also surprised at the wide margin of victory, although those who supported the sale were optimistic the rule changes would pass. The changes to the bylaws and articles of incorporation allow the shareholders of the Bessemer Ditch to use water outside the ditch boundaries for the first time since the ditch was incorporated in 1894. While the Pueblo water board intends to lease water back to farmers on Pueblo County’s largest ditch for at least 20 years, it is now assured it will be able to move water outside the ditch…
The purchase was undertaken partly as a defensive move against other water providers who have made offers on the ditch, and Pueblo may not need the water for 30 years, Hamel added. In response to one complaint, Hamel also said Pueblo water users have conserved water, reducing their per capita consumption by 15 percent since 2002.
Bessemer Ditch: Bylaws changes
May 3, 2009
Here’s a look at one Bessemer Ditch shareholder’s view on the proposed bylaw changes coming up for a vote soon along with the Pueblo Board of Water Works plans to buy shares, from Chris Woodka writing for the Pueblo Chieftain. From the article:
Mike Bartolo is proposing a different path that would keep water rights in the hands of irrigators while guaranteeing Pueblo the ability to use some of the water when it was needed. His idea – which he admits is sketchy – is for the Pueblo Board of Works to buy the development rights shares in the Bessemer Ditch rather than purchasing shares outright. That would ensure that the water would stay in the ditch, while a portion of it would be available to Pueblo as it is needed. “The city would have to dish out less, maybe about $4,000-$5,000 an acre, rather than $10,000 to purchase rights,” Bartolo said. “The grower would retain the rights and the city could lease up to 30 percent when they need it.”[...]
Bartolo is also aware of Pueblo’s track record on past sales of the Booth-Orchard and Twin Lakes that left behind wastelands in Pueblo and Crowley counties and doesn’t trust the Pueblo water board’s promises that the same thing wouldn’t happen on the Bessemer Ditch. “I think the Board of Water Works has failed miserably to understand that they are not buying a chunk of a ditch, but are destroying the autonomy of it,” Bartolo said. “They are destroying the value of the Bessemer Ditch.”[...]
Bartolo is not opposing the right of anyone along the Bessemer Ditch to sell, and said he understands the reasons some of his friends and neighbors want to sell at this time. He believes more time investigating the potential impacts of the sale and the alternatives is needed, however. The Bessemer Ditch has been a target for urban water sales since the 1980s, when other ditches in the valley sold. Because there is not one large block of shares immediately available, as there were on the Rocky Ford Ditch and Colorado Canal, no sales ever materialized. The current sale was born from a failed effort in 2007-08 that happened in a very public way. The second time around, the water board lined up sellers through a broker at a higher price that lured more takers. While some shareholders met in the 1980s to prevent sales at that time, there has been little public discussion in the past 20 years about whether water rights should be sold or what other options are available.
Bartolo recently joined Super Ditch – a land fallowing, water management program – in an effort to share in the research into the value of ditch rights by the Lower Arkansas Valley Water Conservancy District. He doesn’t know if the idea of selling water while while keeping the water rights through long-term lease contracts is practical, but said the idea needs to be investigated. Bartolo’s own idea is taken from practices used in some conservation easements, where the future development rights are purchased to maintain a property’s character. The price is the difference between the current worth and the value of developing the property – in this case, water rights. “It preserves the rights of guys who have worked hard and want to cash in their chips,” Bartolo said. While he’s pitched the idea to shareholders through a handout at this year’s annual meeting, to the Lower Ark board, to The Pueblo Chieftain editorial board and at an informal meeting with some members of the water board, Bartolo has found few takers so far…
The water board’s proposal amounts to a “pig in a dress,” that would buy and dry farmland, Bartolo said. “They would lease it back for 20 years, but that’s pathetic,” he said. “When it comes time, the water board will make a business decision with the goal of providing cheap water for Pueblo. The water they are leasing to Aurora could generate five to six times the revenue in agriculture. They haven’t been a good partner to the valley.” Not all of the consequences of what could happen to the Bessemer Ditch’s water rights have been explained, Bartolo added.
Bessemer Ditch: Bylaws changes sparking conflict
April 30, 2009
The Pueblo Board of Water Works is trying to buy shares of the Bessemer Ditch as part of a strategy to lessen the city’s dependence on transmountain water — and to make sure that Pueblo can keep growing of course. The purchase requires changes in the bylaws of the ditch association and that has some of the ditch members alarmed. They’re mounting opposition to the changes according to a report from Chris Woodka writing for the Pueblo Chieftain. From the article:
On one end of the [issue] are the Pueblo Board of Water Works, St. Charles Mesa Water District and those who want to sell to the water board. At the other end are numerous small shareholders who say that the 1894 articles of incorporation and bylaws of the ditch company should not be changed. Neighbors and families are in disagreement about what to do, and a historic decision could be made at a special meeting of shareholders at 6 p.m. May 11 at the Pueblo Convention Center.
Both sides have mailed or handed out a flurry of information in preparation of the meeting to try to sway shareholders. As a mutual ditch association, the decision is up to private water rights holders, just like other water transfers in the Arkansas River basin over the past 50 years have been…
The almost 900 shareholders have stakes ranging from just one share to several hundred. The St. Charles water district has about 2,000 of the 20,000 shares on the ditch. The Pueblo water board wants to buy 5,000 shares, mostly for future needs and to keep thirsty cities to the north from raiding the local canal. In order to do that, however, the water board wants clear direction from the Bessemer shareholders that it will be able to use the water in the future. “We will be investing a large sum of money in these shares and we must protect that investment by amending the governing documents to give us the opportunity to move the shares out the ditch when needed in the future,” water board Executive Director Alan Hamel said in a letter to shareholders…
The Pueblo and St. Charles water boards have committed to use the water within Pueblo County, but the possibility of using the water outside the county would remain in the bylaws at the request of the Bessemer Ditch board, in order to maintain maximum value. The water board also has committed to make improvements on the ditch and lease back the water to shareholders, and states its aims in a way that tries to convince non-sellers they would be hurting neighbors by resisting the changes.
“The effect of not approving the changes to the governing documents is that your friends and neighbors who want to sell will not be able to sell their shares to the Board of Water Works, or any other entity that want to use the water outside the ditch,” Hamel stated.
Some of the shareholders of the Bessemer Ditch who want to sell have written their own letter asking for the cooperation of others, arguing that the change of bylaws will increase the value of everyone’s water rights. “If you have interest in leasing your water (perhaps to the Super Ditch) or selling in the future, then you’ll vote for the changes, allowing the water to be moved from the ditch,” the letter states. The letter is endorsed by 27 shareholders, most of whom are reportedly among those with contracts with the water board. They state that the negotiations between the St. Charles and Pueblo water boards have strengthened protections for shareholders who choose not to sell. The changes in the bylaws and articles of incorporation increase the value of water while maintaining the ability to farm and the quantity of water per share, they say, urging support of the changes.Opponents of the bylaw changes have presented reasons not to change the bylaws for months. An analysis by Mike Bartolo, a small shareholder on the ditch and head of the Colorado State University Ag Research Center at Rocky Ford, claims the price per acre-foot in the current offer is a little more than $5,000 or roughly half of the cost per share, and criticizes the way the Pueblo water board has portrayed the price. Bartolo also urged shareholders to look at leasing as an opportunity and has joined the Super Ditch board on behalf of Bessemer shareholders. Leonard DiTomaso, who with Mike Klun was elected to the Bessemer Ditch board in January on promises to fight for preserving agriculture on the ditch, has been tireless in sending out letters to try to convince shareholders to leave things as they are. “Everyone I talk to, shareholders and non-shareholders, thinks our ditch should live forever,” DiTomaso said. “I agree. People like seeing our green irrigated farms. Most of the farms are well-managed and cared for.”
From the Pueblo Chieftain (Chris Woodka):
The latest proposal would allow Bessemer shareholders to sell water to users outside Pueblo County, but would restrict leases of water obtained by the Pueblo and St. Charles water boards…
Pueblo and St. Charles Mesa have agreed to first use water within their service areas in Pueblo County, unless service areas expand beyond county lines. Any water not needed would be leased to remaining shareholders on the Bessemer Ditch. If no leases within the ditch or county are possible, Pueblo and St. Charles Mesa could lease the water anywhere in the Arkansas Valley, but not outside the valley. Other shareholders on the ditch would not be restricted in selling water to anyone outside the county or the valley. In the first draft of proposed changes, use was limited to Pueblo County. The requested change came from the Bessemer Ditch board, Hamel said. “(The amended agreement) commits us to lease back our shares,” said Executive Director Alan Hamel. “This reflects the board’s commitment to agriculture and the economy of Pueblo County.” The board also makes commitments in the St. Charles Mesa agreement that safeguard other shareholders on the ditch, Hamel added…
Bessemer Ditch shareholders will have a special meeting at 6 p.m. May 11 at the Pueblo Convention Center to consider changes in the bylaws and articles of incorporation. The changes made in the proposed bylaws satisfy some of the objections raised by shareholders over an earlier version of by-law changes, but there is still organization opposition to any change in bylaws. Some claimed restricting future sales to Pueblo County would lower the value of Bessemer shares and create a monopoly for the Pueblo and St. Charles Mesa water boards. “We still don’t want to change the bylaws,” said Leonard DiTomaso, who was elected to the Bessemer Ditch board in January along with Mike Klun on promises to oppose sales of water outside the ditch boundaries and support farming on the ditch. “That means forever and ever. What’s this land without water? We really don’t want to concede any points.”
Lower Ark farmers criticize Chieftain editorial
April 16, 2009
An editorial that ran in Sunday’s Pueblo Chieftain caused a flash flood of negative reactions from downstream of Pueblo, according to a report from Chris Woodka writing for the…umm…Pueblo Chieftain. From the article:
“If Bob Rawlings had asked me, he wouldn’t be making all those dumb statements,” said Leroy Mauch, a Lamar farmer who sits on the Lower Ark board. Rawlings is the publisher of The Chieftain. Mauch’s comment came after farmers who are members of Super Ditch told the board an editorial Sunday unfairly characterized how the ditch operates and what the effects of future agreements with Aurora would be. They also told the board they agreed with the Aurora deal, which limits how Aurora will lease water in years to come. The Lower Ark district sued Reclamation in 2007 over a contract that allows Aurora to move water out of the Arkansas Valley…
Last month, Aurora and the Lower Ark agreed to support a two-year stay while they ask Congress to approve Aurora’s use of the Fry-Ark Project, the central point of dispute in the case. The Lower Ark also helped form the Super Ditch, a water leasing corporation formed by water rights owners on seven canal systems, last year. Super Ditch figures heavily in the lawsuit agreement.
“It’s disturbing to me that we are accused of selling the water. We never suggested we would be selling the water,” said John Schweizer, Super Ditch president and a Rocky Ford farmer. “The Pueblo Board of Water Works can buy Bessemer Ditch water and it’s OK, but not if anyone else wants to lease water. It’s not fair.”
“(Rawlings) says he’s a fan of the Arkansas Valley, but not if it helps farmers east of Pueblo? He contradicts himself,” said Dale Mauch, a Lamar farmer. “The Super Ditch was formed to protect the water. The alternative is buy-and-dry. If we don’t have the Super Ditch, that’s what’s going to happen.”
“(The editorial) makes it sound like in a drought we would be drying up 100 percent of the valley. Only a very small percent of the land would be taken out,” said Fred Heckman, a McClave farmer. “It’s missing the economic benefit of leasing water.”[...]
In the past month, some shareholders of the Bessemer Ditch have joined others from the Catlin, Fort Lyon, High Line, Holbrook, Otero and Oxford canals in Super Ditch.
Ag to urban transfers
April 11, 2009
Last year a subcommittee of the Arkansas Basin Roundtable presented a report detailing a blueprint for transfers of agricultural water to urban use. Chris Woodka (Pueblo Chieftain) has written a detailed analysis of the model’s application to current projects in the basin, well actually, the non-application of the model to current projects in the basin. From the article:
The model, Considerations for Agriculture to Urban Transfers (pdf), was developed by a committee of the Arkansas Basin Roundtable over two years of meetings…
The roundtable, in its review of the report, was divided on whether it should have “teeth” or remain a voluntary document. Whether the teeth should be the sharp fangs of state enforcement or the grinding molars of county review was also debated. If the document remains voluntary, it could just be a set of quaint dentures on the shelf. At the Colorado Water Congress meeting in January a water project developer – Aaron Million, who wants to bring water from Flaming Gorge Reservoir in Wyoming to the Front Range – asked a water provider who served on the roundtable committee – Wayne Vanderschuere of Colorado Springs Utilities – why the Front Range Water Council had not adopted the document. The council comprises the major importers of Western Slope water, including Denver, Aurora, Colorado Springs, Pueblo, Twin Lakes and the Northern and Southeastern water conservancy districts. Vanderschuere said the report was too preliminary to actually be used…
[Last Wednesday the Arkansas Basin Roundtable]…talked about how to get more water from the Western Slope, how to increase municipal water conservation; how to protect the investment value of ag water rights; how to meet environmental, wildlife and recreation needs; and even why the impacts of SDS on agriculture were not more fully discussed. “We need to put in projects to give alternatives to water rights owners besides a sale,” said Beulah rancher Reeves Brown. All of those questions are addressed in the water transfers document, which was virtually ignored in the discussion…
Gary Barber, chairman of the roundtable and an agent for El Paso County water interests, said the way deals are going forward is like the situation described in the Tragedy of the Commons, a 1968 scientific paper by Garrett Hardin that dealt with population problems. Hardin basically described how unbridled self-interest could destroy a shared resource. “I think what’s happened is that the environmental and recreation communities have entered the conversation, and we have to find an equitable way to satisfy that interest,” Barber said. There are other efforts to incorporate outside interests, even those who may not know they have a stake in the decisions being made today.
Bessemer Ditch postpones vote to change bylaws
April 11, 2009
From the Pueblo Chieftain (Chris Woodka): “The special meeting of shareholders of the ditch will be at 5 p.m. May 11 at the Pueblo Convention Center, board member Leonard DiTomaso said Friday. DiTomaso, who was elected to the board in January, said he is gathering support to fight changes that would allow water to be used outside the ditch’s boundaries. He farms on the Bessemer and wants water to stay in the ditch for future generations. ‘People on the mesa are on a rampage,’ DiTomaso said. ‘In Colorado, people do have a right to sell water, but we’ll be damaged if they transfer it out.’
“The proposed changes in the bylaws have been substantially altered, mainly at the request of the Bessemer board, said Executive Director Alan Hamel. The meeting was delayed in order to provide shareholders more time to consider the changes, as well as allowing the water board and the St. Charles Mesa Water District board an opportunity to review them. Those boards entered an agreement last month that would allow certain changes in the bylaws…
“The Pueblo water board is looking to buy at least 5,000 shares of the Bessemer Ditch, about 25 percent, at $10,150 per share, but contracts are contingent on obtaining a change of bylaws.”
