Windy Gap Firming Project: Longmont Councillors eschew debt, ready to pony up $47 million cash

Map from Northern Water via the Fort Collins Coloradan.
Map from Northern Water via the Fort Collins Coloradan.

From The Longmont Times-Call (Karen Antonucci):

The Longmont City Council reached a consensus Tuesday night — they would rather the city pay roughly $47 million in cash instead of using debt for a portion of the Windy Gap Firming Project.

Water rates are set to increase by 9 percent in 2017, 2018 and 2019, then 8 percent in 2020 and 2021, said Dale Rademacher, general manager of public works and natural resources.

Paying cash for Windy Gap is cheaper for the city in the long run, but staff estimates it will raise water rates by 21 percent in 2017 and then by another 22 percent in 2018, rather than the planned 9 percent. Debt financing would have cost almost $25 million more in the long term with a predicted 5 percent interest rate but resulted in more gradual rate increases between 5 and 14 percent in the short term…

City Manager Harold Dominguez said there are plans in the works to test utility rate discounts for low-income households. To qualify, a single Longmont resident would need to make less than $12,720 in a year or a married couple would need to earn less than $17,146 in a year, although those limits could have adjusted slightly since the test program was introduced.

The City Council also directed Rademacher to explore alternative financing so the entire burden of the $47 million doesn’t fall on ratepayers. There’s a Windy Gap surcharge on new water taps that sunsets at the end of 2017. Councilmembers said they’d rather the surcharge just stayed in place in order to generate funds for the Windy Gap project.

Additionally, a property owner can either transfer non-historical water rights to satisfy a raw water requirement or pay cash-in-lieu. Staff will study limiting it to cash payment only in order to pay for Windy Gap.

Meanwhile, here’s the view from Grand County (Lance Maggart):

The long awaited development of Northern Water’s Chimney Hollow Reservoir cleared one of the final two hurdles on the road to construction in late March when the Colorado Department of Public Health and Environment (CDPHE) released its 401 water quality certification for the project, generally referred to as the Windy Gap Firming Project (WGFP).

The issuance of the 401 water quality certification from the CDPHE was one of two final steps in the permitting process required for construction on the project to begin. The 401 certification from the state comes after 13 years of work. According to Northern Water’s Public Information Officer Brian Werner Northern Water began the formal permitting process for the development of Chimney Hollow Reservoir in 2003. Since beginning the formal permitting process Northern Water and other participants have spent roughly 15 million dollars on the projects permitting process.

Now that Northern Water has received their 401 certification from the state the municipal water provider is awaiting a 404 wetlands permit from the US Army Corp of Engineers, the final permitting step before construction can begin on Chimney Hollow.

404 WETLAND PERMITS

As a matter of practice 404 wetlands permits from the Corp of Engineers require issuances of state certifications, like the CDPHE 401 water quality certification, before the Corp of Engineers can complete their own permitting processes. “This is the next to the last step in getting the project permitted,” stated Project Manager Jeff Drager.

Officials at Northern Water said they expect the 404 wetlands permit is forthcoming and anticipate its issuance in the next few months. Werner was quick to point out that Governor John Hickenlooper has officially endorsed the project, a first in the history of the state according to a press release from Northern Water highlighting the endorsement.

“Northern Water and its many project partners have worked diligently, transparently and exhaustively in a collaborative public process that could stand as a model fro assessing, reviewing and developing a project of this nature,” stated Hickenlooper in a letter read at Northern Water’s Spring Water Users meeting in Loveland last week by the Governor’s Water Policy Advisor John Stulp.

Once Northern Water has secured the final permit for the project from the Corp of Engineers work on Chimney Hollow Reservoir can begin. Chimney Hollow is eventually expected to store 90,000 acre-feet of water and will be located just west of Carter Lake Reservoir in southern Larimer County. The development of the reservoir will mean additional water diversions out of Grand County. The total estimated price tag for the WGFP is around $400 million.

ENDORSEMENTS

Despite environmental concerns produced by the additional diversions both Grand County and the conservation group Trout Unlimited have endorsed the project, following sustained negotiations between Northern Water and various stakeholders from the western slope regarding environmental mitigation and adaptive management plans for the Colorado and Fraser Rivers. A press release from Trout Unlimited praised the river protections that were reaffirmed with the state 401 certification.

“We strongly believe these permit conditions establish a strong health insurance policy for the Upper Colorado River,” stated Mely Whiting, counsel for Trout Unlimited. In their press release Trout Unlimited outlines conditions within the 401 certification the organization feels will address both fish habitat issues and water quality needs including: monitoring of stream temperatures, key nutrients and aquatic life, providing periodic “flushing flows” to cleanse the river during runoff and requiring ongoing monitoring and response if degraded conditions are detected.

The 401 certification and the environmental protections included with it were made possible in part from a more collaboratively minded interaction between west slope stakeholders such as Grand County and Trout Unlimited and east slope diverters Northern Water and Denver Water. “This long-term monitoring and flexibility of response is called ‘adaptive management’ and it’s a critical feature of the permit requirements,” stated Whiting. “Adaptive management recognizes that stakeholders can’t foresee every problem, and it provides a process for ongoing monitoring and mitigation of river problems as they arise.”

Grand County local Kirk Klancke is the president of the Colorado Headwaters Chapter of Trout Unlimited and has long championed the health of both the Fraser and Colorado Rivers. Klancke spoke positively about the adaptive management and collaborative spirit that has made negotiations for the WGFP possible. “We wouldn’t be at this point without the leadership of Grand County and their persistent efforts to improve the health of the Colorado River,” stated Klancke. “The Northern subdistrict also deserves credit for listening to our concerns and working with all stakeholders to find solutions.”

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