Larimer pays $8.4 million for farm, water rights — Loveland Reporter-Herald

Colorado-Big Thompson Project east slope facilities
Colorado-Big Thompson Project east slope facilities

Here’s the release from Larimer County (Kerri Rollins):

Larimer County Department of Natural Resources purchased a 211-acre farm southwest of Berthoud, along with its valuable water rights. The deal closed Monday, August 8.

Using Help Preserve Open Spaces sales and use tax dollars, Larimer County Department of Natural Resources purchased the property, known previously as the Malchow Farm, to conserve its agricultural, historic, scenic, community buffer and educational values. General public access is not permitted at this time. Larimer County plans to continue leasing the property as an active agricultural farming operation.

The Town of Berthoud provided $100,000 to Larimer County to help purchase the farm, which will also help leverage a potential Great Outdoors Colorado funding request being submitted later this month.

“We’re excited to acquire this farm and its myriad of conservation values,” said Gary Buffington, director of Larimer County Department of Natural Resources. “The property helps us further our mission to conserve working lands and foster an appreciation for our agricultural heritage in Larimer County.”

This property is located one mile southwest of Berthoud, just north of the Little Thompson River and adjacent to U.S. 287 on the highway’s west side. It consists of high-quality agricultural soils, with approximately 188 irrigated, 18 pasture and 5 farmstead acres. Located just north of the Larimer-Boulder county line, the property serves as a gateway to Larimer County and a doorstep to the town of Berthoud, with sweeping views of Longs Peak and the Front Range. The property contains several historic features, including a pioneer gravesite, beet shack and a big red barn that can be seen for miles. The Overland Trail once crossed the property.

The property, infrastructure and minerals were purchased along with the valuable water rights, including 240 units of Colorado-Big Thompson, or C-BT, water, 16 shares of Handy Ditch native water rights and 20 shares in Dry Creek Lateral Ditch.

Larimer County is actively seeking partners to engage in a water sharing agreement on this property that will provide partnership funds toward the purchase of the water, keep the farm in active production and allow water partners to share some of the water in drought years. This water sharing agreement, known as an Alternative Transfer Mechanism, or ATM, is a cooperative solution encouraged by the Colorado Water Plan to share water across uses without permanently drying up high-quality working farms, such as this farm near Berthoud.

Larimer County has developed a stewardship plan for the property and will develop a full management plan with public input within the next several years. The property was purchased from the Malchow family, but an official name for the property, now that it’s a Larimer County open space, will be chosen at a later date. Public tours of the property are planned for later this year.

For additional information, contact Kerri Rollins, Open Lands Program manager, at (970) 619-4577.

From The Loveland Reporter-Herald (Pamela Johnson):

Larimer County now officially owns the 211-acre Malchow farm south of Berthoud and its associated water rights — a unique agreement that includes a water sharing component.

The $8.4 million sale from the Malchow family to the Department of Natural Resources closed Monday.

The county bought the property to conserve its agricultural, historic and scenic values and plans to continue leasing the fields as an active farm.

One unique aspect of the sale was that the county also bought the water rights, including 240 units of Colorado-Big Thompson water, with the intention of entering into a water sharing agreement.

Under such an agreement, the farm may vary its crops over several years, so in drought years, some of the irrigation water can be sold.

This allows the farm to stay in production for the long-term and is an arrangement encouraged by the Colorado Water Plan.

The farm is located along U.S. 287 one mile southwest of Berthoud, and along with rich farmland, it includes historic buildings and a pioneer grave site believed to be tied to the Overland Trail, which once crossed the property…

The farm will not immediately be open for public access. However, a management plan that will be developed within the next few years could include an educational component in which the farm may be used to teach the public about agriculture.

The town of Berthoud pitched in $100,000 toward the purchase of the property, and Larimer County will be applying for a Great Outdoors Colorado grant to help with the cost.

Longmont councillors weighing cash v. debt for Windy Gap participation

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

From the Longmont Times-Call (Karen Antonacci):

The Longmont City Council on Tuesday will make several high-level decisions on how to finance the Windy Gap Firming Project.

In March, the council opted for the costlier 10,000 acre-foot level of the $387.36 million project, which would bring the pricetag for Longmont up to about $47 million. In April, the council directed they would prefer to pay with cash rather than debt for the $47 million, which would save money in the long-term but mean steep rate hikes in the short-term.

Now, staff has come back with a third option — a mix of cash and debt financing.

The council has already approved and codified raises to rates of 9 percent in both 2017 and 2018. If the council chose to finance the complete $47 million through rate increases, rates would need to rise 21 percent in 2017 and 22 percent in 2018, staff wrote to council in a memo.

But, raising rates is a little unpredictable for staff, because people might use less water in order to save money. While that helps with the city’s water conservation goals, it could make financing a huge project like Windy Gap tough.

“What we do know is that if we have a rate increase, it dampens consumption because people do react to an increased cost. What we’ve seen over time is that initial reaction tends to go away over time,” said Dale Rademacher, general manager of Longmont public resources and natural works…

By contrast, if Longmont chose to finance the $47 million project with $16.7 million in bonds, rates would not increase beyond the planned 9 percent in 2017 and then by 14 percent in 2018 and another 14 percent in 2019. The downside to debt is that it costs more in the long-term.

At a projected 4.25 percent interest rate, bonding out $16.7 million would cost the city $55.75 million over 20 years.

In the middle, staff has proposed bonding out only $6 million of the cost and financing the rest through rate increases.

This option would mean rate increases of 17 percent each in 2017 and 2018, between the two extremes of 21 percent with all cash and 9 percent with the higher debt option.

Rademacher said council could choose to bond out $6 million of the cost without a vote of the public…

Council on Tuesday needs to decide which financing option they want, and by extension, how much rates should raise in 2017.

Rademacher said all the rate raises are projected to happen by January 1, 2017 and if a major bonding issue needed to go to the ballot, staff are projecting to put it in front of voters in November, 2017.

Council could also decide to wait on the financing decision and get more public feedback on the issue. While there were questions related to Windy Gap on the regular Longmont resident survey, staff decided to remove those questions and ask council about a more specific survey.

National Research Center submitted a bid in order to survey Longmont residents about whether they would prefer to pay cash or debt for Windy Gap. To do an online-only survey would cost $3,440. To mail out a survey to randomly selected households would cost between $5,130 and $11,850 depending if NRC targeted 800, 1,500 or 3,000 households.

Broomfield purchases 120 shares of water for $3.24 million — The Broomfield Enterprise

Colorado-Big Thompson Project east slope facilities
Colorado-Big Thompson Project east slope facilities

From The Broomfield enterprise (Danika Worthington):

The auction room was packed with bidders, but only 13 — including the City and County of Broomfield — emerged from the Larimer County Fairgrounds with a piece of the Reynolds portfolio. Municipalities, developers and farmers all grabbed some units of Colorado-Big Thompson water, while developers and growers signed deals for land.

The auction was of high interest, given the land’s location in the path of northern Front Range development and the large amount of water attached to it.

Although the numbers are still preliminary, Hall and Hall Auctions partner Scott Shuman said 276 CB-T units brought in the largest chunk of money, about $7.6 million or an average of $27,356 each. The CB-T units, already trading for high sums, were expected to be the most pricey given their scarcity and the ability to use the water for uses such as agriculture, development and industrial processes, including oil and gas extraction.

According to Pat Soderberg, finance director for Broomfield, the city and county placed a bid for 120 shares at $26,000 per share, plus a 4 percent processing fee.

That puts Broomfield’s purchase at $3.24 million, with a 10 percent down-payment of $324,480. The balance will be paid at closing, Soderberg said.

But on a per-share basis, the 15.75 Highland Ditch shares stole the show, averaging $148,900 each for an estimated total of $2.3 million. All the shares were sold to farmers or investors.

Although CB-T water got most of the attention prior to the auction, Shuman said the ditch shares provide more acre-feet of water than CB-T and are not limited to a specific geography. CB-T water, which is conveyed from the headwaters of the Colorado River near Grand Lake, can be used only within the boundaries of the Northern Colorado Water Conservancy District.

Loveland: City Council to consider buying more water Windy Gap storage, Tuesday, August 2

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

From the Loveland Reporter-Herald (Saja Hindi):

City of Loveland staff members will ask for approval from the Loveland City Council Tuesday to buy up to an additional 3,000 acre-feet of storage space in the Windy Gap Firming Project.

The meeting will take place at 6 p.m. in the municipal building at 500 E. Third St…

The city of Loveland already has 7,000 acre-feet of storage committed in the project and has an immediate opportunity to buy 2,000 more, each 1,000 requiring an immediate payment of $159,851 to Northern Water, according to a council memo.

City staff members are bringing a resolution to council members to ask that they be allowed to purchase up to 3,000 acre-feet because council members previously expressed interest in bumping the city’s storage to 10,000 acre-feet, the memo stated.

“Modeling indicates that this storage acquisition would increase the City’s overall firm yield value, available during drought conditions, by 500 acre-feet,” the memo stated.

The city’s estimated costs for the 7,000 acre-feet is $32,866,434, $2,084,608 of which has already been paid, according to the memo. Adding the 2,000 acre-feet would make the city’s estimated payment costs $42,136,434. An additional 1,000 acre-feet would be another $4,635,000 in costs.

Staff members are seeking new resolutions to obtain the 10,000 acre-feet because the ones passed in 2008 were for lesser amounts.

The Loveland Utilities Commission unanimously approved the resolution being recommended to City Council.

Colorado-Big Thompson units average $27,356 per share in farm auction near Mead

Colorado-Big Thompson Project Map via Northern Water
Colorado-Big Thompson Project Map via Northern Water

From The Denver Post (Danika Worthington):

The auction of family-owned Reynolds Farm outside Mead raked in $12.6 million Thursday, as farmers, developers and five cities bid for land and the attached water and ditch rights.

The auction room was packed with bidders, but only 13 emerged from the Larimer County Fairgrounds with a piece of the Reynolds portfolio. Municipalities, developers and farmers all grabbed some units of Colorado-Big Thompson water, while developers and growers signed deals for land.

The auction was of high interest, given the land’s location in the path of northern Front Range development and the large amount of water attached to it.

Although the numbers are still preliminary, Hall and Hall Auctions partner Scott Shuman said 276 CB-T units brought in the largest chunk of money, about $7.6 million or an average of $27,356 each. The CB-T units, already trading for high sums, were expected to be the most pricey given their scarcity and the ability to use the water for uses such as agriculture, development and industrial processes, including oil and gas extraction.

But on a per-share basis, the 15.75 Highland Ditch shares stole the show, averaging $148,900 each for an estimated total of $2.3 million. All the shares were sold to farmers or investors.

@USBR Releases Draft Environmental Assessment for Tri-Districts Long-Term Excess Capacity Contracts

Colorado-Big Thompson Project east slope facilities
Colorado-Big Thompson Project east slope facilities

Here’s the release from Reclamation (Buck Feist):

The Bureau of Reclamation has released the Draft Environmental Assessment (EA) for the proposed Tri-Districts Long-Term Excess Capacity Contracts for public review and comment.

The Draft EA evaluates environmental impacts associated with Reclamation’s proposed approval of 40-year excess capacity storage, exchange, and conveyance contracts between Reclamation and East Larimer County Water District, Fort Collins-Loveland Water District, North Weld County Water District (collectively referred to as Tri-Districts).

“Excess capacity contracts are very important,” said Eastern-Colorado Area Manager, Signe Snortland. “These provide a needed benefit of water management flexibility, so Districts are better equipped to address drought, changes in municipal demand, and temporary changes in the watershed affecting water quality.”

Tri-Districts have annually requested annual excess capacity contracts to mitigate poor water quality conditions in the Cache La Poudre River due to increased particulate matter due to the High Park and Hewlett wildfires in 2012. The long-term contracts would allow Tri-Districts to utilize excess capacity in Horsetooth Reservoir for storage, exchange and conveyance of the Tri-Districts’ water supplies for delivery to the Soldier Canyon Water Treatment Plant. Each district would execute a separate contract with combined total exchange and storage contract volumes not to exceed 3,000 acre-feet (af).

The Draft EA is electronically available at http://www.usbr.gov/gp/ecao/nepa/cbt_tridistricts.html.

Comments on the Draft EA can be sent to: tstroh@usbr.gov; Terence Stroh, Bureau of Reclamation, 11056 West County Road 18E, Loveland, CO 80537; or faxed to 970-663-3212. For additional information or to receive a printed copy of the Draft EA, please contact Terence Stroh at 970-962-4369 or tstroh@usbr.gov. Reclamation requests comments on the Draft EA on or before August 5, 2016.

Mead: 13.75 shares in the Highland Ditch, 276 units of Colorado-Big Thompson water on auction block

For nearly 30 years, Mead was a bustling community. At its peak, Mead had three general stores, a hotel, a combination grocery store and meat market, two saloons, butcher shop, filling station, two auto garages. Photo via HistoricHighlandLake.org.
For nearly 30 years, Mead was a bustling community. At its peak, Mead had three general stores, a hotel, a combination grocery store and meat market, two saloons, butcher shop, filling station, two auto garages. Photo via HistoricHighlandLake.org.

From The Denver Post (Danika Worthington):

“Water is the new gold,” said Scott Shuman, a partner in Hall and Hall, the auction house that will sell 411 acres of the Reynolds Farm and 13.75 shares in the Highland Ditch, along with the big-ticket item: 276 units of Colorado-Big Thompson water.

As Colorado’s population has grown, so has demand for water. Shuman said he expects farmers, cities and developers to try to get a piece of the Reynolds Farm portfolio…

High demand means prices are already high. C-BT shares have sold for between $25,000 and $28,000 each, according to the Northern Colorado Water Conservancy District, the agency that manages the C-BT system — which conveys water from the headwaters of the Colorado River to the Front Range and plains.

This means the C-BT water alone could bring in $6.9 million to $7.7 million, compared with the auction house’s estimate for the land of $5,000 to $15,000 per acre, or $2 million to $6.2 million…

These particular water rights are especially attractive because they can be used for multiple purposes — agriculture, development and industrial processes, including fracking — and can be easily traded as long as they stay within C-BT boundaries, said Reagan Waskom, director of Colorado State University’s Colorado Water Institute…

The Reynolds farmland, which is northeast of the intersection of Interstate 25 and Colorado 66, is bounded by Weld County roads 9 1/2, 32 and 13, and another property.

It is not annexed into a town, although it is in Mead’s growth area. Town manager Mike Segrest said he assumes it will be annexed in the future…

“The price of water is out of reach and the price of land is out of reach.” Waskom said. “Those are development prices.”

He said a farmer would need to have deep pockets and be willing to work the land without making much profit. He added that a young farmer could buy the land and the ditch rights and not the C-BT shares, shifting to dryland farming of crops such as wheat. But that’s a difficult transition and profits would be minimal, especially compared with an irrigated farm.

“Bankers are not going to go there with him,” Waskom said.

It’s more likely that a developer will buy the land, Waskom said. A developer could build on the land or transfer the water rights to a water provider that supplies an area where it has a project.

“I feel like it is inevitable,” Waskom said about the possibility that the water will be separated from the land. “I wish we could plan it better so that our best agricultural lands could stay in working lands. To me, it’s all being driven by the market, which I’m not saying is bad, but it may not end up with the kind of Front Range Colorado we want in 10 to 20 years.”

Colorado-Big Thompson Project Map via Northern Water
Colorado-Big Thompson Project Map via Northern Water