Good afternoon everyone. Sorry about the delay in responding to all the posts this weekend. I hope I can answer most of the questions asked about the Center of Colorado Water Conservancy District and Referendum 5A with this post (I apologize in advance for the length of this posting, but these are complicated issues).
Who and what is Center of Colorado? Center of Colorado is a water conservancy district formed by the vote of Park County’s citizens in 1997 as part of the effort to defeat the Park County Sportsmen’s Ranch project. Center is managed by the following 5 member board of directors: Lisa McVicker, Ron Swanigan, Geri Salsig, Briggs Cunningham and Craig Steinmetz. The board members are essentially volunteers for these positions and they each serve four year terms. Center’s Board meets on the first Wednesday of every month at 6:30 pm at 548 Front Street in Fairplay.
Center’s mission statement is ”Park County water for Park County.” In fulfilling that mission, Center gets involved in two primary activities: it opposes actions that are detrimental to water resources in Park County and it develops water resources for uses throughout Park County. I will discuss each of these activities in more detail below.
Center is not part of Park County nor is it affiliated with the BOCC or the Park County Land and Water Trust Fund. The Land and Water Trust Fund is funded by a 1% sales tax, not the 1 mil property tax that funds Center’s activities. The only connection between Center and the County is that Center and the Upper South Platte Water Conservancy District (USPWCD) provide 5 acre feet of water per year without charge to the Road and Bridge Department to help with road maintenance, construction and dust control.
Opposition activities. The first 5-6 years of Center’s existence were pretty much directed at defeating the Park County Sportsmen’s Ranch project. Sportsmen’s Ranch and Aurora spent approximately 7 million dollars on that project and the related litigation. Center’s participation, and the 1 mil property tax which funds Center, were key to helping defeat that project. It was not until about 2004 that Center finally paid off all of the expenses incurred in defeating Sportsmen’s Ranch. Center is still in court now trying to collect the cost judgment awarded to it by the water court.
From 2004 onward, Center has been involved in many water cases and proceedings (including County 1041 permit proceedings) that Center believes are detrimental to the water resources and interests of the citizens of the County. For example, Center participated in opposing: the 1041 permit application by Will O Wisp for Tanglewood; claims by a Denver developer that water flowing out of an old mine tunnel on Mt. Sherman and into Fourmile Creek is nontributary; a recent proposal by Denver water developers to create a special district in Alma that would have facilitated the transfer of water outside the County; the proposed in-situ uranium mining near Hartsel; many other miscellaneous water cases and projects.
Water resource development activities. Water is a fungible commodity in Colorado and it can be transferred from a use in Park County (i.e., irrigation) to municipal and other uses outside of Park County. Water is a private property right that is very valuable. A single acre foot of senior water rights (325,851 gallons), which is enough to serve 2-4 households, can cost $10,000 to $15,000 to acquire.
Park County sits at the top of the South Platte watershed so water in Park County is valuable to the Front Range since the water can flow downhill to the Metro area in the streams without expensive pipelines. There are basically two ways to ensure that water will be kept in Park County – the owner can voluntarily put the water in a conservation easement and tie it to the land, or it can be acquired by a local entity (as opposed to a Front Range entity) that will keep the water uses within the County. Center has been very active in the last few years trying to acquire and develop water resources to keep them in the county. Center owns water rights on Michigan Creek and water rights and a small reservoir on Mosquito Creek. Center and the USPWCD own water rights on Deer Creek near Bailey and on Currant Creek. USPWCD owns water rights and storage space in Spinney Mountain Reservoir. Since water is so expensive, and Center is in competition with the Front Range entities for the remaining water in the County, borrowing funds to acquire water rights is often necessary.
Several years ago, Center and the USPWCD formed the Headwater Authority of the South Platte as an enterprise to operate the districts’ water rights. HASP operates a blanket plan for augmentation through which customers can buy water for various kinds of water uses. Examples of current customers include people who operate a mobile home park, restaurants, a laundromat, have ponds for fish, wildlife and recreation, and people who need water for outside uses such as lawn and garden irrigation and horse watering when their wells are limited to in-house use only purposes. The Districts’ augmentation plan has already been through the water court process thus this expensive and time-consuming part of the water development process has been eliminated. For a normal use, it takes a few months and a few hundred dollars to go through the HASP process to augment a proposed water use and it takes years and tens of thousands of dollars for an individual to go through the water court process on their own.
Storage of water is a necessary and vital element to controlling the water resources within the County. It costs between $8,000 to $12,000 per acre foot to construct a storage facility from scratch. Thus, a 50 acre foot storage facility (which is about 7 acres of surface an average of 7 feet deep) can cost in excess of a half million dollars to build. Most of the water rights in Colorado were originally appropriated for irrigation and most of Center’s and the USPWCD’s water rights are converted irrigation water rights. Thus, the water rights are available to divert during the spring/summer irrigation season only. Storage is required so that the water can be used year round and to prevent it from running down the stream to Denver.
Center needs to construct storage facilities to store the water it and the USPWCD already own. Due to the costs associated with constructing storage, some limited borrowing is very helpful because it allows for expensive projects to be built and to be repaid over time. The population of the Front Range is not shrinking, nor are their water needs, so the borrowing helps ensure that Center has the financial flexibility to oppose the future water grabs that may come along or to make water rights acquisitions that otherwise would go to the Front Range.
There were some specific questions asked about the borrowing that Center proposes in 5A. TILT has stated repeatedly that Center is asking the taxpayers of Park County to “co-sign” these loans. That is not correct. Remember, Center is proposing to borrow money but to repay the loans only with existing revenues and WITHOUT RAISING TAXES. To borrow money, Center will pledge its unpledged regular revenues as the collateral. No matter the size of the loan, the repayment terms, etc. . . , no taxpayer will pay any more than the 1 mil tax they already pay. Thus, no taxpayer is co-signing anything.
Another question was, what happens if Center defaults? First, Center does not anticipate defaulting. The Board will be very careful to not borrow in an irresponsible manner so that the loan cannot be easily repaid with its existing revenues. Second, in the unlikely event of a default, nothing will happen as far as a taxpayer is concerned. As discussed in the previous paragraph, no tax increase can or will be part of any loan obligation. In the event of a default, neither Center nor the creditor can raise any additional revenues with a tax increase and will be limited to repaying the loan with the revenues that were pledged as the collateral in the first place.
I hope this helps with some of the questions about Center and Referendum 5A.
Please let me know if you have other questions.
Sincerely
Jim Culichia