Photo: The San Juan Water Conservancy District board listens to a reading of a proposed public statement, December 10, 2025.
In some cases, a divorce is amiable. The partners agree to go their separate ways, but remain friends, and whatever possessions they once shared are split fairly, with no lingering issues.
My sense, based on casual observations, is that most divorces are not fully amiable, particularly when children are involved.
Often, a court of law is needed to resolve the disagreements.
Also needed: lawyers for each side. It can get expensive.
Last week, on December 5, District Court Judge Justin Fay published an order related to Case No. 2024CV30069. This court case began in 2024 when Pagosa Area Water and Sanitation District (PAWSD) and San Juan Water Conservancy District (SJWCD) failed to agree on the clear meaning of a joint agreement concerning a proposed reservoir project on the Running Iron Ranch. The agreement was signed in 2016 between SJWCD, PAWSD, and the Colorado Water Conservation Board.
In my opinion, the dispute centers on the following paragraph of that agreement:
5.2.1. PAWSD agrees to make every effort to retain the Running Iron Ranch during the Planning Period made possible by this Agreement. In the event that PAWSD, in its sole discretion but after consultation with SJWCD and CWCB, does sell the Running Iron Ranch during the Planning Period, the following terms shall take effect…
The SJWCD Board believes the 2016 agreement prohibits PAWSD from selling the jointly-owned Running Iron Ranch during the agreed-upon “Planning Period” which runs from 2016 until 2036. The SJWCD Board also seems to believe that they are fully capable overseeing the construction of a large reservoir on the Ranch within the next ten years.
The PAWSD Board does not believe the reservoir proposed by SJWCD is feasible or prudent, and would like to sell the Ranch and relieve PAWSD customers of a $10 million debt. PAWSD bases its right to sell the property on language in the 2016 agreement indicating that PAWSD can decide to sell the Ranch within the Planning Period “at its sole discretion.”
Disclosure: I currently serve on the PAWSD Board of Directors, but this editorial reflects only my own opinions, and not necessarily the options of the PAWSD Board as a whole, or the PAWSD staff.
Like PAWSD, SJWCD is a governmental district with responsibilities related to ensuring that the community has sufficient water resources. But unlike PAWSD board members, SJWCD Board members are appointed by a judge, rather than being elected by the taxpayers.
And unlike PAWSD, SJWCD does not treat or deliver drinking water.
And unlike PAWSD, SJWCD gets nearly all its funding from property taxes, while PAWSD gets most of its funding from monthly customer fees for water and sewer services.
In 2024, PAWSD filed a request to have the Court interpret the legal meaning of the 2016 agreement, and clarify whether, according to the agreement, PAWSD has the right sell the Ranch without the approval of the joint owner, SJWCD.
SJWCD then filed a counter suit asking for a summary judgment, claiming that there were no disputed facts in the case. Such a summary judgment would likely have saved both districts significant legal fees. But Judge Fay asserted, in his December 5 order, that disputed facts do indeed exist, and thus he did not issue a full summary judgment as requested by SJWCD.
Following the publication of Judge Fay’s order, the SJWCD Board met and approved the following public statement:
Statement of the San Juan Water Conservancy District – December 10, 2025
On December 5, 2025, the District Court for Archuleta County issued an Order resolving some key points in the lawsuit filed by Pagosa Area Water and Sanitation District (PAWSD) against the San Juan Water Conservancy District (the Conservancy District). Significantly, the Court ruled that PAWSD cannot sell property the Districts jointly own before September 27, 2036, unless PAWSD can show it has made “every effort” to retain the property during that period. The Court also ruled that PAWSD cannot abandon the reservoir project planned for the jointly owned site during that same period.
The Court’s Order does not completely resolve the issues raised by the lawsuit. Some facts will have to be determined at trial unless the Districts agree to settle their differences.
PAWSD justified its attempts to abandon the reservoir project and sell the property as being beneficial to PAWSD ratepayers. To the contrary, ratepayers will benefit from holding the property. Evidence the Conservancy District has gathered for trial shows that increased loan costs triggered by a sale any time before 2036 would be significant.
Sale of the District-owned property also deprives the community of land uniquely suited to developing water rights obtained through substantial investment of time and money made over several decades. Water storage projects are not outside the reach of small communities. They require patient and persistent efforts for planning, design, construction, and operation, and collaboration to serve a number of community needs.
The Conservancy District continues to work diligently to advance the reservoir project. The Conservancy District recently engaged RJH Consultants Inc. to support the Conservancy District with planning, design, and construction services. RJH has begun work on materials the Conservancy District plans to submit to the federal Bureau of Reclamation’s small storage grant program.
The District Court’s Order concludes a year in which the Conservancy District has spent almost $90,000 to pay lawyers, experts, and other litigation-related expenses. PAWSD is spending ratepayer funds on this lawsuit as well. A trial will multiply the costs for both Districts.
The Conservancy believes the Court’s Order and the WestWater Research financial analysis answer fundamental questions that have divided the Districts, and it hopes PAWSD is willing to engage with the Conservancy District in good faith discussions to end the costly litigation. Settlement would better serve the constituents of both Districts.
Attachments [which you can download]:
Order Granting in Part, and Denying in Part, Defendant’s Motion for Summary Judgment for Declaratory Relief, Pagosa Area Water and Sanitation District v. San Juan Water Conservancy District, Case No. 2024CV30069 (Archuleta Cty., CO Dec. 5, 2025)
WestWater Research Memorandum dated November 19, 2025, Financial Review of the San Juan River Headwaters Project Dispute.
The divorce between PAWSD and SJWCD has not been amiable. And their one shared possession — a 660-acre ranch just north of downtown Pagosa Springs, in the Dry Gulch Valley — remains a potent point of contention, 13 years after the divorce in 2012.
Following the publication of SJWCD’s joint statement, the PAWSD Board met in executive session with their attorney, to discuss the next steps in this unfortunate — and expensive — situation.