Southern Delivery System update: Damages awarded to rancher vacated by Colorado Supreme Court

February 12, 2015
Southern Delivery System route map -- Graphic / Reclamation

Southern Delivery System route map — Graphic / Reclamation

From The Pueblo Chieftain (Chris Woodka):

The Colorado Supreme Court vacated a Pueblo District Court order that would have required Colorado Springs to pay Pueblo County rancher Gary Walker more than $500,000 in costs in a legal dispute over Southern Delivery System.

The order, issued last week, throws out former District Judge Victor Reyes’ Dec. 4 decision to award Walker Ranches $387,000 plus 8 percent annual interest since 2011 for costs leading up to a trial that has been postponed several times. That amounted to about $509,000.

Reyes retired at the end of last year.

Reyes issued a supplemental order that the payment was binding because of Colorado Springs’ 1041 land-use agreement with Pueblo County that prevents “undue financial burdens” for Pueblo County residents affected by SDS.

The state Supreme Court directed Pueblo District Court to determine costs after a trial to determine the value of the easement for SDS across Walker Ranches. The trial is scheduled to begin in April.

Colorado Springs had argued legal costs should not be negotiated until after the trial concluded, while Walker’s lawyers said costs were incurred even as Colorado Springs sought delays for trial.

Walker has not made a request for payment under the 1041 agreement from Pueblo County commissioners, and the county is not a party to the dispute over payment, said Ray Petros, special counsel for Pueblo County.

Walker and Colorado Springs are miles apart on the value of the SDS pipeline easement. Colorado Springs contends it is worth $100,000, while Walker’s attorneys filed documents indicating damage to the ranches as a whole from the pipeline is $25 million.


Pueblo County is caught between enforcing water quality upstream and supporting a variance for the City of Pueblo

January 24, 2015

Fountain Creek Watershed

Fountain Creek Watershed


From The Pueblo Chieftain (Chris Woodka):

Pueblo city and county officials are at odds over water quality regulations that could add millions of dollars to city sewer expenses.

The rift was great enough that the Pueblo Area Council of Governments backed down from a vote Thursday to support a variance for selenium and sulfates the city is seeking from the Colorado Water Quality Control Commission.

PACOG delayed its vote one month, after putting it off in December as well, in order to allow Pueblo County Commissioner Terry Hart to participate in debate.

Hart, along with Commissioners Sal Pace and Liane “Buffie” McFadyen, raised concerns that the county’s ability to insist on standards from upstream communities in El Paso County under the 1041 permit for Southern Delivery System would be compromised if they agreed to support a variance for Pueblo.

“Commissioner Hart is not here, and he wants to have a say,” McFadyen said. “In our future, we will have water quality issues in this county and we need to be consistent.”

That means the city will have to go into a state pre-hearing on Feb. 4 without support from other local governments. The variance itself will be considered by the state in April.

Pueblo City Manager Sam Azad said sewer fees could double or triple if the city is forced to meet numeric standards.

The reach of the Arkansas River below the Pueblo wastewater treatment plant has naturally high levels of selenium and sulfates. If numeric standards are enforced, no additional releases would be allowed.

Pueblo would have to pay up to $92 million and $9 million annually to seal its wastewater lines from collecting groundwater and to treat water released from the plant to remove all traces of contaminants, said Wastewater Director Gene Michael.

Sealing the lines from collecting groundwater, $35 million of the total, would actually increase selenium because existing treatment removes some of it from water that’s released. The disposal of waste from reverse-osmosis treatment would compound environmental damage, Michael said.

“Let me be crystal clear, the county is not in favor of spending $92 million,” Pace said.

One of the conditions of the delay was to give environmental attorneys John Barth of the county and Gabe Racz of the city time to work out a way to gain county support for the resolution without jeopardizing future SDS deliberations.

While Pace said that agreement was close, the city disagreed.

“It’s unlikely John Barth and the city would agree to anything,” said Dan Kogovsek, city attorney.

After an hour of discussion, City Council President Steve Nawrocki agreed to back off a vote until the February meeting in hopes of getting unanimous support from PACOG before the April state rule-making hearing. Pace and McFadyen promised the vote would not be delayed again.

More water pollution coverage here. More Fountain Creek watershed coverage here. More wastewater coverage here. More stormwater coverage here. More Southern Delivery System coverage here.


Stormwater hangs up SDS request — The Pueblo Chieftain

January 17, 2015
Southern Delivery System route map -- Graphic / Reclamation

Southern Delivery System route map — Graphic / Reclamation

From The Pueblo Chieftain (Chris Woodka):

Controlling stormwater on Fountain Creek has surfaced as a key issue for use of the Southern Delivery System in light of the rejection of the Pikes Peak Drainage Authority by El Paso County voters in November.

A proposal to use the SDS pipeline to deliver water to a system just north of Colorado Springs could be a test of Pueblo County’s 1041 regulations for SDS.

Donala Water and Sanitation District has asked for an exemption or finding of no significant impact from Pueblo County 1041 conditions on its plan to move water from rights it purchased in 2009 on the Willow Creek Ranch south of Leadville.

A Pueblo County analysis of votes in the Donala district shows its residents rejected stormwater control by a 60-40 margin.

“Serious concerns over compliance with (1041 conditions) are raised by the failed efforts in El Paso County, including within the city of Colorado Springs and Donala, at establishing, financing and maintaining stormwater controls,” Pueblo County Planner Joan Armstrong wrote in a letter to Donala last week.

“The recent failure of the November ballot pro­posal in El Paso County on stormwater fees only heightened those concerns.”

Donala plans to use excess capacity in the SDS pipeline from Pueblo Dam to Colorado Springs and a conveyance agreement with Colorado Springs Utilities to move an average of about 436 acre-feet (143 million gallons).

SDS is not expected to come on line until at least 2016, and Donala is not the only community interested in using it. Colorado Springs has the majority of capacity in the line, which won’t reach its full volume of 78 million gallons daily for several decades.

The move would provide about one-third of the water for 2,600 taps serving 8,000 people in the Donala district. It also would reduce Donala’s dependence on non-renewable groundwater from the Denver Basin aquifer.

Donala asked for the exemption because the amount of water falls short of the 500-acrefoot threshold that normally would trigger a 1041 permit review.

Armstrong asked Donala to address the question of whether larger amounts of water could be moved through the pipeline.

She also explained that the county also is interested in the maximum — not just the average — flows that could be moved to Donala through SDS, and in complying with certain conditions of the 1041 permit for SDS, including stormwater control.

The county asked Donala if it still intends to amend its service plan to control stormwater, as manager Kip Peterson indicated in a 2013 interview with The Pueblo Chieftain.

The county also wants to know which of the projects identified in the 2013 El Paso County Stormwater Needs Assessment by CH2MHill would serve Donala and whether the district intends to fund or construct any of those projects.

More Arkansas River Basin coverage here.


Southern Delivery System: 1 mile bore under I-25, Fountain Creek, and the railroad should be completed 1st quarter

December 28, 2014
Southern Delivery System route map -- Graphic / Reclamation

Southern Delivery System route map — Graphic / Reclamation

From The Colorado Springs Gazette (Monica Mendoza):

A giant teeth-gnashing machine is boring its way 85 feet under Interstate 25, two sets of railroad tracks and Fountain Creek. The machine is cutting a 1-mile long tunnel about 20 miles south of downtown Colorado Springs for a section of a massive pipeline project that will carry millions of gallons of water from the Pueblo Reservoir to Colorado Springs. It is the most complicated and dangerous part of the 50-mile stretch of the Southern Delivery System project, said Brian Whitehead, Colorado Springs Utilities project manager. If all goes as planned the tunnel should be completed in the first quarter of 2015.

“This is the last section of the pipe to be constructed and the most complex part,” Whitehead said. “There are risks – it’s not something anyone can do.”

Construction on the biggest Utilities project in its history began in 2010. The Southern Delivery System project was envisioned as the way for the city to handle future growth, said Jay Hardison, Colorado Springs Utilities water treatment plant project manager. It took years to plan and receive the proper permits from federal, state and county officials. The plan also was reviewed and approved by the Federal Aviation Administration because the new water treatment plant and holding tank off Colorado 94 are in the flight line near Colorado Springs Airport.

SDS cost, water rates

– Project cost: $841 million.

– Utilities customers’ water rate increased by 12 percent in 2011 and 2012 to cover cost of project.

– Utilities customers’ water rate increase by 10 percent in 2013 and 2014.

Southern delivery system timeline

2009: Final approvals and permits secured.

2010: Construction started.

2011: Construction began at Pueblo Dam and on the raw water pipeline.

2012: Pueblo Dam connection complete.

2014: Raw water pipeline construction complete.

2015: Raw water pump stations expected to be complete.

2016: Water treatment plant and finished water pump stations expected to be completed and SDS delivers water to Colorado Springs, Fountain, Security and Pueblo West.

2020-2025: Phase 2 could begin to expand capacity at the water treatment plant

Source: http://www.sdswater.org

More coverage from Monica Mendoza writing for The Colorado Springs Gazette:

At the start of the economic recession in 2008-09 work slowed at the Northwest Pipe company, which manufactures pipe in Denver. Then in 2010, the contracts for the massive $841 million Southern Delivery System project started dropping, said John Moore, Northwest Pipe operations manager. Colorado Springs Utilities was building a 50-mile pipeline from Pueblo Reservoir to Colorado Springs.

“When it dropped, we went from hanging on, hibernation mode, to Pueblo and production,” Moore said. “At the apex, we had 235 people employed working two shifts. For us it meant business was up.”

Utilities has hired 380 businesses in Colorado to plan and build the pipeline and water treatment plant, spending an estimated $489 million on contracts in the state. Of that, Northwest Pipe won $110 million in work.

The company made four to five pipes a day. In all it manufactured 7,000 pieces of pipe for the project. Beyond the direct contracts, there was a ripple effect, Moore said.

“Anytime you have a project this size, you are coordinating with suppliers and trucking companies,” Moore said. For example, during peak production, as many as 25 trucks a day left Northwest Pipe’s manufacturing facility. “We used local suppliers – the truck company was local.”

“The other thing that might be missed in the number is that most of the people who work on these crews putting the pipe in, there is a lot of inspection required, people making sure they are doing things right,” Moore said. “We have reps coming in, there is a huge travel industry associated with this project in rental cars, hotels and air travel.”

There is about one mile of pipeline left to complete in the project. Then Northwest Pipe will be done and moving on to water projects in Texas and other states, Moore said. The company has nine manufacturing plants across the country.

“Across the country, water infrastructure is getting old – water pipes are getting old,” Moore said.

More Southern Delivery System coverage here and here.


How will CSU’s $50 million for Fountain Creek mitigation be spent?

October 2, 2014
Southern Delivery System route map -- Graphic / Reclamation

Southern Delivery System route map — Graphic / Reclamation

From The Pueblo Chieftain (Chris Woodka):

While the decision of how to spend $50 million for flood control on Fountain Creek to benefit Pueblo will be made by the parties directly involved, other input will be needed.

“Anyone who wants to come to the table and says, ‘We want to find out where money for these projects will be available,’ is welcome,” Pueblo County Commissioner Terry Hart said.

Last week, Hart made a pitch to the Fountain Creek Watershed Flood Control and Greenway District to begin planning now for the arrival of $50 million in payments from Colorado Springs Utilities after Southern Delivery System goes online in 2016. That money is seen as seed money for projects that could amount to $150 million or more identified in a corridor master plan. The money was negotiated by Pueblo County under its 1041 agreement with Utilities in 2009 for the construction of the SDS water supply pipeline through the county. It is to be used for flood control projects on Fountain Creek that benefit Pueblo County. When the district was established later in 2009, it became the recipient of the money.

“At a minimum, Pueblo County, CSU and the Fountain Creek district need to be involved, and they will have the final say,” Hart said.

But the city of Pueblo and the Lower Arkansas Valley Water Conservancy District also should have input about how the money will be used, Hart said.

The greatest potential damage from Fountain Creek flooding is within the city of Pueblo and in the communities of the Lower Ark Valley downstream from Fountain Creek.

“The Lower Ark District was instrumental in developing the corridor plan, and we definitely need the technical input from the city of Pueblo,” Hart said.

The corridor plan, a joint effort of Utilities and the Lower Ark district, identifies projects between Fountain and Pueblo that could cost several times the $50 million that was earmarked under the 1041 agreement. Pueblo already has participated in pilot projects to demonstrate flood control techniques.

In addition to technical assistance, Pueblo County’s attorneys will have to be involved to determine whether projects meet the conditions of the 1041 permit. This will be important to avoid the kinds of dispute that developed when the Lower Ark raised objections about how its contributions to the district were being spent.

“I see this new committee working in concert with the steering committee (Utilities, Lower Ark and the Fountain Creek District),” Hart said.

More Fountain Creek coverage here.


Whatever else is in it, the biggest element of #COWaterPlan plan will be cooperation — Chris Woodka

August 24, 2014


From The Pueblo Chieftain (Chris Woodka):

Whatever else is in it, the biggest element of Colorado’s water plan will be cooperation.

“Water can either divide or unite us. In the end, it’s our choice,” Gov. John Hickenlooper told the Colorado Water Congress last week. “In this state, we work together, and we have to make sure it doesn’t divide us.”

When Hickenlooper called for a state water plan last year, it had a direct impact on most of the water professionals attending the summer workshop. Four months from the finishing line, the governor reiterated the importance of water to Colorado. The draft plan will be on the governor’s desk in December, whether or not Hickenlooper survives an election challenge from Republican Bob Beauprez. Beauprez addressed the Water Congress Friday.

Hickenlooper heaped praise on the work of basin roundtables, which have been meeting since 2005, and have spent the past year developing basin implementation plans.

“The roundtables, while not as glamorous and sexy as bare-knuckle water brawling in neighboring states and here in the past, have moved forward,” he said.

“It has not been just a small group of people in Denver directing how it will be used, but a broad group of people working together to write a plan.”

Hickenlooper highlighted the Arkansas Valley Conduit as an example of water projects that benefit the outlying areas of Colorado. Hickenlooper said he and Colorado Water Conservation Board Executive Director James Eklund talked with Mike Connor, deputy secretary of the Interior, earlier this year to ask him to move funds to provide more money for the conduit. Last week, the Bureau of Reclamation announced $2 million in funding for the conduit this year.

“That $2 million is a good first step for Southeastern Colorado, an area that has been in a drought for years,” he said.

From The Pueblo Chieftain (Chris Woodka):

Whether it’s putting in a new dam or pipeline, leasing water from farms or simply conserving water, municipal customers should be prepared to pay more for mitigation.

“With any project, we have to be prepared to look at the question: What are the underlying costs?” said Mark Pifher, permit manager for the Southern Delivery System being constructed by Colorado Springs Utilities.

Pifher led a panel of those who have worked on Colorado’s largest municipal water projects to explore the obvious and hidden add-on costs of water development. The event was part of the Colorado Water Congress summer convention.

In the case of SDS, an $840 million pipeline from Pueblo Dam to Colorado Springs, about $150 million in additional costs to meet permit requirements has been tacked on.

Aurora paid additional costs for its lease of High Line Canal water 10 years ago, with an additional $1.3 million on top of $10.8 million in direct payments to farmers and $1.4 million for a continued farming program now in its tenth year on the Rocky Ford Ditch.

In the Rocky Ford Ditch program, Aurora provides some of the water it purchased to allow farmers to stay in business.

“We’re thinking we’ll continue the program in the future,” said Tom Simpson, Aurora’s engineer in the Arkansas Valley. “One thing of concern is the availability of water in the Arkansas basin.”

New storage projects also come with a price tag for mitigation.

Travis Bray of Denver Water said the $360 million Gross Reservoir expansion project, designed to increase yield by 18,000 acre-feet, has cost an additional $30 million in mitigation so far, as it moves toward full permitting, projected to happen in 2015.

Jeff Drager of the Northern Colorado Water Conservancy District said its $300 million Windy Gap Project, designed to increase storage by 90,000 acre-feet, has cost $19 million in mitigation and 3,000 acre-feet of water.

Along with the money, agreements with affected communities cost time. Both projects are a decade behind schedule.

“I was a young guy when we started, and now my kids are out of college,” Drager said. “I’d just be happy to get this done by the end of my career.”

Even conservation has hidden costs, said Jason Mumm with MWH Global, a consultant on many municipal projects. He presented detailed analysis that showed how reduction of water use drives water rates up. As a result, customers may wind up paying the same amount of money or more after paying for appliances that reduce water use.

“Conservation is good, but we do need to understand that it comes with its own costs,” Mumm said.

More Colorado Water Plan coverage here. More conservation coverage here. More Windy Gap Firming Project coverage here and here. More Moffat Collection System Project coverage here and here. More Southern Delivery System coverage here and here.


Southern Delivery System: Pueblo county firms net $65 million in orders during construction

August 7, 2014
Southern Delivery System route map -- Graphic / Reclamation

Southern Delivery System route map — Graphic / Reclamation

From The Pueblo Chieftain (Chris Woodka):

The estimated construction cost of the Southern Delivery System, a water pipeline from Pueblo Dam to Colorado Springs, has been lowered to $841 million, about $145 million less than earlier estimates.

“It’s our responsibility to manage project costs as closely as possible to protect the investment being made by the SDS partner communities,” said Janet Rummel, spokeswoman for Colorado Springs Utilities.

The timing of SDS construction saved money primarily because of lower interest rates and lower pricing for materials and services, she said.

“Competitive bidding has allowed more than 100 Pueblo County-based businesses to benefit from $65 million in SDS spending so far,” Rummel said.

Although most of the benefit from SDS goes to Colorado Springs, Pueblo West, Security and Fountain also are SDS partners.

The pipeline has a capacity of 96 million gallons per day, with 78 mgd going to El Paso County.

Pueblo West will increase its capacity by 18 mgd through a connection to the newly constructed north outlet works.

Its current connection at the south outlet delivers 12 mgd — just above the metro district’s peak-day delivery. The outlet is shared by the Pueblo Board of Water Works and the Fountain Valley Authority. It also will be the hookup for the Arkansas Valley Conduit.

Pueblo West has paid $6.5 million for construction of its SDS connection, and estimates it will have paid a net price of $6.7 million — when all bills and refunds are totaled — by 2017.

The money came from reserves, said Jack Johnston, metro district manager.

“We have cash-funded the project out of reserves that were collected primarily during the growth years,” Johnston said. “They were fees that were set aside to help build the reserves to do capital projects.”

Pueblo West got some of the SDS savings, but just for the construction nearest the dam, where its 36-inch-diameter connection splits off from the 66-inch-diameter line that runs 50 miles north.

“Whatever savings were realized in building the north outlet works were passed on to us,” Johnston said.

Pueblo West had been negotiating an agreement to turn on SDS ahead of schedule, since its spur from the dam will be ready for use ahead of the rest of the project.

However, the board last month delayed action on a draft agreement that could allow early turn-on of SDS. If no agreement is reached, the startup would be whenever Colorado Springs gets the go-ahead from Pueblo County to turn on SDS, expected in 2016.

Colorado Springs must meet Pueblo County’s 1041 permit conditions in order to start SDS.

Those conditions include $50 million in payments, plus interest, to the Fountain Creek Watershed Flood Control and Greenway District; $15 million for road rehabilitation in Pueblo West; and $2.2 million for Fountain Creek dredging in Pueblo. All of those payments are included in the $841 million construction cost.

Colorado Springs also will pay $75 million for wastewater system improvements by 2024 within the city under the 1041 permit, but that cost is not included in the estimate.

More Southern Delivery System coverage here.


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