Confluence: Communities eye regional water bank

LOVELAND — Continued “buy-and-dry” activity, whereby irrigated farmland is converted to other uses, could mean the loss of one-third of such irrigated farmland in Northern Colorado by 2050.

But a regional “water bank” could help stem that trend, with Northern Colorado communities working together to minimize “buy-and-dry.”

That was the message from Peter Nichols, who practices water law, water-quality law, environmental law, and land and water conservation law at Berg Hill Greenleaf Ruscitti LLP, a Boulder-based law firm.

Nichols moderated the “Banking on Water” panel at Confluence: the Northern Colorado Water Conference, Thursday, at the Ranch event complex in Loveland.

“Colorado faces the challenge of meeting the needs of an urban population projected to double by 2050,” Nichols said. Cities purchase water and agricultural land to secure water for residential or commercial uses.

“The loss of irrigated agriculture means a loss of an economic base,” Nichols said, with closure of ag and non-ag businesses.

Community leaders and residents in Northern Colorado bristle at municipalities outside the region acquiring farms and their water rights, with that water to be repurposed to support their own residential and commercial growth. One example is Thornton, which over decades acquired about 17,000 acres of Weld County farmland.

Fort Collins mayor Wade Troxell addresses the crowd Thursday during The NISP Decision, a panel at Confluence: the Northern Colorado Water Conference. Other panelists included Brian Werner of the Northern Colorado Water Conservancy District and LeRoy Poff, a Colorado State University professor and researcher. The panel was moderated by Jennifer Gimbel, a senior water policy scholar with the Colorado Water Center at Colorado State University. Christopher Wood/BizWest

Thornton has been embroiled in a lawsuit with Larimer County over construction of a proposed $423 million, 72-mile pipeline to begin taking about 14,000 acre feet of water out of the region and to the fast-growing Denver suburb.

Eric Wilkinson, former general manager of the Northern Colorado Water Conservancy District, noted that the region first discussed formation of a regional water bank decades ago. He said the discussions focused not only on protecting water rights but also protecting the economic foundation that those water rights actually represent, especially agriculture.

A water bank would include a governing board with tax and bonding authority, providing a revenue stream to acquire water for use within the region, either for agricultural or residential, industrial or commercial uses.

Wilkinson noted that sale of agricultural water rights remains a private-property issue. Many farmers might view their water rights as essential elements of a retirement plan, which itself can lead to sales to any willing buyer.

“If this area wants to keep the water in this area, then in my opinion, you’re going to have to compete on the open market with people who want to export the water outside of this area,” he said. “They [farmers] have a right to do with that water and their land as they see fit. Because it’s a property right, they look at that as an asset.”

If farmers get to the point that they want to sell their water rights, they’re going to sell to the highest bidder, he said.

He said that with any regional water bank, “You need cash flow, and a way to lay your hands on revenue readily” in order to acquire water on the open market.

He said the earlier effort did not come to fruition because, at the time, the threat from outside municipalities was not that great, and it involved a tax, which would have been difficult to pass.

Sean Chambers, director of water and sewer for the city of Greeley, said municipalities are “ground zero” in terms of buy-and-dry activities and the impact on municipalities.

On the one hand, Greeley requires water for new residents and industry, but the city represents the economic center of Weld County and is heavily dependent on the agricultural sector as an economic base.

“In Greeley, there’s a direct tradeoff when supply is taken out of production,” Chambers aid.

He said a regional water bank would provide a structure to hold and retain water rights for future economic purposes.

“It’s not news to us, but water is a finite and scarce resource to us in the West,” he said, with the level of competition and price escalation increasing during the current economic upturn.

Economic and population growth in Northern Colorado, as well as competition for the scarce water resource by metro-Denver communities, has helped to drive up prices.

That’s incentivized Northern Colorado municipalities to explore alternate strategies, he said.

“These kinds of cooperative banking ideas are very attractive to us,” he said.

Richard Seaworth, managing partner of Wellington Water Works LLC, farms about 2,000 acres north of Wellington, with additional farms in Nebraska and Kansas.

His farm contracts with major agribusinesses to supply certain commodities, whether it be for dairies or large food-production companies such as General Mills.

One challenge to the idea of municipalities working with farms to draw water away from agriculture in certain years poses a big problem for farmers, he said, as they are required to provide feed to dairies on a set schedule, for example.

“Ag rents water from municipalities and districts but will have some issues when the drought hits,” he said.

He noted that population growth carries some major challenges for farmers, with new residents objecting to farm equipment on the roads and other factors.

“As growth moves in, it’s very hard to farm in this area,” he said.

Seaworth questioned whether any shares purchased by a water bank would ever reach the market again.

“I agree that we have to be on the open market,” he said. “But when a municipality goes and buys a water right, CBT shares, it’s never going to come back on the market. Once it goes to a municipality, it’s over.”

Ray Caraway, CEO of the Community Foundation of Northern Colorado, has been fostering a renewed discussion among local communities — including Fort Collins, Greeley, Loveland and Windsor — about potentially establishing a regional water bank.

“Local communities have done an outstanding job of planning at the local level,” Caraway said. “Regional planning is not a hallmark of Northern Colorado. Do we have any kind of regional vision? Are we ever going to solve these problems that we’re talking about without better regional cooperation? Is a water bank ever something that will come to fruition without more regional cooperation?”

He said, “No one disagrees about lack of regional vision, not only in regard to water but in regard to other areas as well. There has been a willingness demonstrated on the part of municipalities and other water suppliers to cooperate.”

Thornton’s efforts to remove water from the region has galvanized the discussion, he said.

“If there’s anything that should be unifying for Northern Colorado, I think it’s this idea of keeping Poudre River water in the Poudre River basin. Thornton is doing a wonderful job of looking to its future.

“I think it’s possible that the Thornton pipeline will serve as a wakeup call,” he added.

The question, he said, is whether the region has the will to address the issue.

“Are we going to continue to wait, are we going to wait until these issues get away from us?” he asked.

LOVELAND — Continued “buy-and-dry” activity, whereby irrigated farmland is converted to other uses, could mean the loss of one-third of such irrigated farmland in Northern Colorado by 2050.

But a regional “water bank” could help stem that trend, with Northern Colorado communities working together to minimize “buy-and-dry.”

That was the message from Peter Nichols, who practices water law, water-quality law, environmental law, and land and water conservation law at Berg Hill Greenleaf Ruscitti LLP, a Boulder-based law firm.

Nichols moderated the “Banking on Water” panel at Confluence: the Northern Colorado Water Conference, Thursday, at the Ranch event complex in Loveland.

“Colorado faces the challenge of meeting the needs of an urban population projected to double by 2050,” Nichols said. Cities purchase water and agricultural land to secure water for residential or commercial uses.

“The loss of irrigated agriculture means a loss of an economic base,” Nichols said, with closure of ag and non-ag businesses.

Community leaders and residents in Northern Colorado bristle at municipalities outside the region acquiring farms and their water rights, with that water to be repurposed to support their own residential and commercial growth. One example is Thornton, which over decades acquired about 17,000 acres of Weld County farmland.

Fort Collins mayor Wade Troxell addresses the crowd Thursday during The NISP Decision, a panel at Confluence: the Northern Colorado Water Conference. Other panelists included Brian Werner of the Northern Colorado Water Conservancy District…