North Weld Water District partially lifts tap moratorium

LUCERNE — A months-long tap moratorium imposed by the North Weld County Water District was partially lifted Monday — but with strict limitations.

The district’s board of directors voted 3-0 to allow up to 120 taps or plant investments per year within four defined zones within the district. Board members Gene Stille, Scott Cockroft and Brad Cook voted in favor, with director Ron Buxman absent.

Board member Tad Stout, who also serves as a member of the Severance Town Council, abstained from the vote. Severance has been at odds with the district over the tap moratorium, which prompted the town to impose its own building-permit moratorium.

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Zones approved for the partial lifting of the tap moratorium largely are west of U.S. Highway 85 and east of Interstate 25, extending north of Colorado Highway 14. Individuals outside of those zones are allowed to seek a variance on the moratorium.

“Based on review of the engineering and modeling, there appears to be enough capacity in the system to start selling taps at a limited number per year,” Zachary White, an attorney with White Bear Ankele Tanaka and Waldron, the district’s general counsel, told the board.

The new policy requires the district manager to monitor and report tap sales to the board on a monthly basis. Fifty taps have been authorized for immediate issuance, with the remainder to be spread throughout 2022.

“This limitation is intended to last until the district is able to complete additional critical infrastructure or acquire additional capacity through our water partners,” White said. “If we’re able to acquire more capacity or complete infrastructure, then under the policy, the district board would set a maximum number of taps to be sold per year.

“Instead of opening up and selling as many taps as anybody might want, this board has discussed addressing that on an annual basis to make sure we’re able to manage our growth, to make sure that we can continue to meet the demand of our current customers,” he added.

The district also adopted a Tap Sale Criteria Policy, which states that only users in current need of water taps would be able to acquire them.

“The district does not intend to reserve or pre-sell water taps,” White said. “The policy establishes that in order to be eligible to purchase a tap, you have to meet certain criteria.”

Those criteria include:

• Property must be subject to a water service agreement with the district.
• Requirements of the water service agreement have been met and accepted by the district.
• Water required to be dedicated to the district has been dedicated and accepted.
• The person or property owner seeking the water tap must own the deed to the property to be served.
• The person or property owner seeking a water tap must be seeking a building permit from the appropriate jurisdiction.

District Manager Eric Reckentine said that about 155 taps are outstanding, with 30 of those formally requested. Another 260 are “being discussed” in the Hidden Valley subdivision.

Board member Cockroft said approval of 50 initially rather than dividing the 120 taps equally by month, would make sense.

“It doesn’t make sense not to quench the thirst, if we’re going to open it up anyway,” he said.

It’s unclear whether the board’s action Monday will alleviate concern among Severance and other stakeholders.

Severance town manager Nicholas Wharton attended the meeting via telephone, along with about 18 other individuals. During a public comment period, Wharton asked for clarification about how the moratorium affects wholesalers, such as the town of Severance, which pay plant-investment fees to the district.

“For the past year and a half, we have been petitioning for additional PIs, for a total of 184 plant-investment fees,” he said. “Most recently, we dropped it to 65 in hopes of being able to receive that. We would like to purchase the additional 184 in total.”

Reckentine responded that the district and town have been negotiating a new water service agreement.

“We were looking at that in the past, but with everything that’s been going on with the district, we’ve held off on wanting to create a new WSA, water service agreement, because we just did one a year ago,” Wharton said. “Right now, what we are requesting is, in good faith, that the district allow us to purchase these PIs and that we then move forward with a new water service agreement.”

Reckentine rejected that option, however, asserting that water service agreements with wholesalers such as Severance should be renegotiated now.

“I believe that the district should move forward with all of the wholesale customer accounts and revise the water service agreements at this time,” Reckentine said, “and that the old water service agreements did not function and that we need to relook at how we’re doing business with the wholesale customers, and we need to ensure, moving forward, that the way we do business is equitable. And I believe this is the current time to do that …

“I think we have issues on how master planning is occurring, how plant investments are being provided to the district, and I believe we should fix that while we’re fixing these other problems.”

Monday’s board meeting occurred at the water district’s North Weld headquarters at 32825 Weld County Road 39 in Lucerne. While the board met in person, public participation was by telephone only. A BizWest reporter attended the meeting in person.

North Weld implemented a tap moratorium Sept. 29, attributing it to potential regulatory delays for a proposed pipeline in Fort Collins and Larimer County.

The district has since acknowledged that it has capacity issues beyond any potential delays for the pipeline.

Legal issues

The district’s tap moratorium has spawned one lawsuit, with the threat of additional legal action. 

Eagle View Farms LLC filed suit in Weld County District Court Feb. 3, alleging violations of a water service agreement through which North Weld agreed to provide water service for the project, a 24-lot subdivision west of Lucerne and north of Greeley on Colorado Highway 392.

Eagle View is seeking monetary damages in an amount to be determined, an injunction forcing the district to provide water service via taps for the project and other judgments, including attorney fees and expenses.

Two other developers also are threatening litigation. In a Feb. 2 letter to the North Weld County Water District’s board of directors and its outside counsel — White Bear Ankele Tanaka & Waldron, a Centennial-based law firm — Benjamin Maresca, an attorney with Fox Rothschild LLP in Denver, said his clients have “serious concerns” related to the tap moratorium.

Fox Rothschild represents Babcock Land Corp., which is developing the Hidden Valley Filing No. 6 project in Severance, and HR Exchange, which is developing The Ridge at Harmony Road in Windsor.