“These are real tough times. They’ll be talking about this in the next century,´ said Tom Cech, executive director of the Central Colorado Water Conservancy District in December 2002. “This is history we’re going through.”
The summer of 2002 was the peak in a drought cycle that began in 1999. Reservoir levels fell, rivers and agricultural ditches ran dry and new residents learned that Colorado’s average rainfall is 14 inches per year.
The year was filled with uncertainty as farmers were forced to shut off wells to preserve senior water use rights, city governments called for residents to reduce consumption and businesses and the state’s tourism industry faltered under the presumption that Colorado forests were “on fire,” as Gov. Bill Owens said, and without water.
“When you tell a farmer his well may be shut off, it causes him to see the end of his farm,´ said Cech, whose water district serves the area between Greeley and Fort Morgan. The Colorado Farm Bureau estimated that without adequate water, Colorado could lose 20 percent to 50 percent of the state’s farmers.
“The total fiscal effect is not available yet, but with the multiplier effect, it will be huge,´ said Ray Christensen, executive vice president of the Colorado Farm Bureau. The multiplier effect occurs when the loss in one industry affects reciprocal industries.
If the drought’s effect on the cattle industry can be used as a measuring stick, the fiscal impact cut deep. According to the Colorado Cattlemen’s Association, 50 percent of the state’s cattle – about 1 million head – were sold. The financial impact of this loss was $154 million, and with the multiplier effect, losses could be as high as $452 million.
In July, the Fort Collins City Council set mandatory restrictions to save 10 percent of consumption to preserve water supplies for next year. Residents achieved the goal and the city carried over 2,800 acre-feet of water for use in 2003.
The carryover had an unexpected backlash as city coffers fell short of budget expectations due to the lower water utility bills. As a result, city officials throughout the Front Range raised rates to compensate.
The state’s tourism industry took a hard hit and local rafting companies struggled to find visitors willing to go down the rivers. Perceptions of a waterless rafting trip increased as the summer continued to be dry.
“Low water doesn’t mean no water,´ said Dave Costlow, owner of Rocky Mountain Adventures rafting company in Fort Collins.
His rafting business is built on tourism and local support; both were down in 2002.
“We were down for sure and tourism is tied to that,” Costlow said. “In July and August we saw pretty typical numbers; most rafters were on vacation.”
According to Costlow, his rafting company stopped offering full-day trips after mid-July, but continued rafting until Aug. 22.
A record-setting blizzard in March 2003 brought relief to the area and helped fill the dry and thirsty reservoirs. But the single storm was not a cure for all of the drought’s ills. Colorado has permanently lost farms that depended on well water and water supply networks are continuing to look for ways to firm up the state’s options for future generations.
“Water use is still down statewide, which is not a bad thing,´ said Brian Werner, public information officer for the Northern Colorado Water Conservancy District. “We are still waiting to see how long the hangover is going to last. In the agriculture area we have not seen usage pick back up; we think the farmers are hesitant to plant the high-water-use, high-value crops.”
How a business manages its inventory can have a tremendous impact on the financial health of the company. Managed properly, inventory can be a great source of increased margins, higher revenue, or a combination of the two.