Photo: Meeting of the San Juan Water Conservancy District board, October 2024.
A Daily Post reader called me on Sunday, wondering why the weekly Pagosa Springs SUN had an article about the “lack of trust” issues currently on display at recent meetings of our two local water district boards — Pagosa Area Water and Sanitation District (PAWSD) and San Juan Water Conservancy District (SJWCD) — and why the Daily Post did not have an update on the conflict.
That will be remedied by this editorial installment, and tomorrow’s as well.
Disclosure: I currently serve as a volunteer board member on the PAWSD board of directors, but this editorial reflects only my own personal opinions, and not necessarily the opinions of the PAWSD board or staff.
Trust can be an issue between the taxpayers and their local governments, but in the case of the Running Iron Ranch controversy, the lack of trust is mainly between two water districts that jointly purchased a potential water reservoir site in 2008, with plans for having the reservoir under construction by 2025.
Currently, the two districts are not even close to having a reservoir project underway. Nevertheless, PAWSD customers are currently paying $250,000 a year on the loan used to purchase the property, with more than $10 million left to pay in principal and interest.
SJWCD, meanwhile, assumed the responsibility, in 2015, for finding financial partners or other funding for the planned project, which they have failed to do, year after year, for nearly a decade.
At their October 30 meeting, the PAWSD board asked a potential purchaser of the Ranch to send an offer to SJWCD, and that offer was sent on November 1. The offer included a very preliminary plan for financing and constructing a reservoir on the Running Iron Ranch. That is to say, after ten years of failing to find a financial collaborator, SJWCD finally had a potential partner making them a proposal.
The offer also included a plan for relieving PAWSD customers of over $10 million in future debt payments.
On November 7, following a closed-door executive session, the SJWCD board unanimously rejected the offer for help in building their reservoir. Amazingly enough, this vote — by seven seemingly intelligent people — took place without SJWCD ever engaging in a conversation with the potential buyer, to clarify the preliminary plans.
Did I mention that the offer included a proposal related to financing the reservoir construction, and for relieving PAWSD customers of over $10 million in future debt payments?
The PAWSD board subsequently scheduled a special board meeting. Included on the agenda were the following potential actions:
- Discussion Regarding and Consideration of SJWCD Contract Rejections, SJWCD Tenure as Project Leader of Dry Gulch Reservoir Project, and Vote of No Confidence Regarding SJWCD as Project Leader
- Discussion Regarding and Consideration of Contract Negotiations Towards a Revised Dry Gulch Reservoir Project and SJWCD Participation
- Discussion Regarding and Consideration of a PAWSD Board Declaration to Actively Sell Running Iron Ranch
- Discussion Regarding and Consideration of Disclosure, by PAWSD and SJWCD, to Potential Funding Agencies of the PAWSD Board’s Intent to Sell Running Iron Ranch
As you might be able to discern from these agenda items, the PAWSD Board had essentially lost all faith in SJWCD’s ability to create a reservoir at Dry Gulch, and SJWCD’s willingness to help get the PAWSD customers out from under their ongoing debt payments.
We are listening here to long-time PAWSD board member Glenn Walsh, referring to the 2015 agreement in which PAWSD agreed to make the annual debt payments to Colorado Water Conservation Board (CWCB), if SJWCD agreed to find a partner to build the reservoir… which, as noted, SJWCD has failed to do.
“We entered into the CWCB agreement in 2015… and of course, the idea at the time was that San Juan would be active in finding partners — federal, state, regulatory, tribal — to build the reservoir. And over the past decade, they have not discovered a single partner. Not even a minor partner. They have not forwarded to us a single letter of interest, over those ten years.
“Then, at their November 7 meeting, they had their first potential partner. It was the partner who came first to PAWSD… and while we haven’t decided to sell the Ranch, we have decided we’re open to offers. And Bill [Hudson] had said, ‘Maybe we can find someone who wants to buy the Ranch, and also work with the community to build a reasonable reservoir project in the middle of it.’
“And I will be honest with you. I said, ‘That’s a great idea, Bill…’ but I was skeptical to the point of being dismissive.
“A month later, just such an offer shows up. A buyer willing to pay a price — we’re still in negotiations, it’s still tentative because the buyer likes to keep a certain level of anonymity about the price and their name — but, a purchaser who has offered a price that could make all of our PAWSD customers whole, going forward.
“30 years of future debt payments, covered. Ten years of accumulated interest payments on Loan A, covered. The San Juan Water Conservancy District’s $1 million grant, covered. And $300,000 of accumulated interest on that grant, covered…”
A previous PAWSD board took on all of these financial obligations, and placed them on the shoulders of their customers, in 2015… in exchange for an agreement from SJWCD, that PAWSD had the right to sell the Ranch “at its sole discretion”.
Mr. Walsh continued:
“The price being offered would cover all of that, and would make available, in the middle of this Ranch — that the buyer would be paying a considerable amount of money for — hundreds of acres for what might be a surprisingly large reservoir, if all of the parties — PAWSD as a minor party, San Juan as a major party, CWCB as a major party, and perhaps Southwestern Water Conservation District as a major party — if everyone wants to work together to develop a rather sizable reservoir.
“And that proposal was not even given a real hearing. It was simply rejected.
“If you read the purchaser’s cover letter, it said they were open to discussing any aspect of the offer. San Juan didn’t even exchange a word with them.”
Following their board vote, SJWCD sent the potential reservoir partner a one-line email:
The San Juan Water Conservancy District met yesterday afternoon and voted not to pursue your offer.
SJWCD then published a public statement that began:
The San Juan Water Conservancy District will not pursue a recent purchase offer from a private developer for the Running Iron Ranch. The SJWCD board made that decision by a unanimous vote at a special meeting held November 7, 2024.
The offer received by SJWCD does not commit to a future reservoir at the Running Iron Ranch as Pagosa Area Water & Sanitation District board members publicly stated the offer would.
Sadly, this is typical government misinformation. The offer definitely commits to working hand-in-hand with SJWCD to try and move the reservoir project forward, pending successful negotiations. But SJWCD refused to even enter into negotiations.
And the PAWSD board never “publicly stated” anything, one way or the other, about any commitments. Publicly, PAWSD merely praised the offer as potentially attractive, and advised the potential buyer to contact SJWCD directly…
…naively believing that SJWCD actually wanted a reservoir partner.
Read Part Seven, tomorrow…