Drought turns water to gold

Towns paying 10 times normal price for water

WINDSOR — In May, the town of Windsor performed a normal function in a normal year: The water department looked at the water budget for the year and sold off 300 extra shares of water to agricultural producers. The price for each share: $20.

Last month, the town ran ads in The Fort Collins Coloradoan and the Greeley Tribune looking to rent water for the summer. The city is in the process of renting 320 shares of water and paying close to $300 a share.

The lesson: When a drought is predicted, hold on to the water you own.

The water marketplace acts just like any other, when supply is high and demand is low, prices are low. When supply is scarce and demand is extreme, prices are outrageous.

Brian Werner, public-information officer for the Northern Colorado Water Conservancy District, said he’s never seen a summer like this one.

“This is a weird year.” Werner said. “Normally, cities own more water than they can use, so they rent it to agricultural users. Fort Collins usually has 15,000 acre-feet of water it doesn’t need.”

An acre-foot is a unit of measurement for water, also referred to as a share or unit. It would amount to a foot of water on a football field, or about 350,000 gallons.

“This year, Fort Collins rented maybe 4,000 acre-feet out early on. Now, no city is renting water out,” Werner said. “Normally, water would rent for $15 to $30 a share. This year, the water is not there and the rental market has dried up. Municipalities have driven the price of water sky high to $150 a share and higher.”

Broomfield is a municipality that had to rent water from agriculture to make ends meet.

“We started renting water four weeks ago,´ said Mike Bartleson, the deputy director of public works in Broomfield. “Two weeks ago, we rented 5,000 units and paid $400 a unit.”

The city is currently on mandatory water restrictions, but needed more water to supply the growing needs of the municipality.

“Normally, we have enough water for a drought the size of what happened during the ’50s,” Bartleson said. “But this drought is shaping up to be much worse than that.”

Fort Collins is not experiencing the water shortage Broomfield is, but the city is no longer sparing any water for other users.

“Normally, the city would rent out 20,000 acre-feet and, depending on the type of water, would rent it for $30 an acre-foot,´ said Dennis Bode, water-resources manager for the city of Fort Collins. After making some early deals for the average price, the city plugged its water-rental business.

“Once prices went up, we were in a position where we didn’t want to rent water out any more,” Bode said.

One risky practice Werner has noticed is farmers selling their water rights to cities and renting the water back.

“It seems like a good idea to sell water and then rent it back. But, this summer, cities aren’t always renting it back and then the farmers are left high and dry,” Werner said.

Right now, cities have the option to rent water from agriculture when the rain stops. But how long can cities survive when there is no more water? And, how many more people can our water supply support?

“A bazillion more (people) if we are stupid enough to.” Werner said. “If we want to grow condos instead of corn we can continue to use water from agriculture.”