Fort Collins council gives initial nod to 1041 rules

FORT COLLINS — Despite pleas from water-district officials and mayors from two other cities to collaborate through intergovernmental agreements, the Fort Collins City Council gave first-reading approval Tuesday night to rules that would implement its authority to address environmental and other concerns under state “1041” regulations.

House Bill 1041, passed in 1974, gives local authority to local governments in cases where governmental units are in conflict over developments, with one asserting authority over another — especially regarding environmental concerns that a local government might have with a project of “statewide” concern being built within a local community.

One such project is the Northern Integrated Supply Project, which has been in the works for years. Spearheaded by the Northern Colorado Water Conservancy District, known locally as Northern Water, NISP has received the state and federal regulatory approvals it needs to build two reservoirs in Northern Colorado and supply the water to multiple cities and water districts. One of those reservoirs, Glade, would be built north of Fort Collins and would feed into a pipeline running south and east, traversing some land within the city.

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In September 2015, just after Larimer County commissioners had expressed support for NISP, the Fort Collins City Council unanimously passed a resolution opposing it over concerns about diminished flows of the Cache la Poudre River through the city. .

The Fort Collins City Council enacted a moratorium on all water-supply and arterial highway development projects in 2021 until it could sort out rules for its 1041 regulations.

The council on Feb. 7 sent city staffers back to work on the third draft of their package of rules, and on Tuesday night heard some of the same concerns as it considered the fourth draft, including from many officials who preferred intergovernmental agreements to the 1041 regulations.

Brad Wind, general manager of Northern Water, told council members that “the constituents you serve and that Northern Water serves desire consistency,” which requires “creating win-win partnerships with as many and as quickly as one can.”

His view was echoed by Chris Pletcher, general manager of the Fort Collins-Loveland Water District, manager Michael Scheid at the East Larimer County Water District, and the Boxelder Sanitation District’s manager Brian Zick and board member Dennis Gatlin. The 1041 regulations, Gatlin said, “will likely create animosity, result in administrative delays, unnecessary cost to ratepayers and unnecessary fiscal demands.” He also preferred enforceable IGAs or memorandums of understanding.

However, former City Councilmember Ross Cunniff, speaking for the Land Conservation and Stewardship Board, said the Poudre River qualified as “an area of state interest under 1041” and praised its authority over “impacts that start outside the city but impact it.”

Gary Wockner, executive director of Save the Poudre, contended that the “regulations will protect the city, property and natural areas. He said state statutes and court cases already allow entities to regulate construction projects that affect a city no matter where they are.

“NISP invoked cross-jurisdictional authority,” Wockner said, “so that horse has already left the barn.” He said the 1041 rules “help you take your power back.”

Among the amendments that staffers offered was approving a project based on Finding of No Significant Impact” — known as FONSI or “Fonzie” — instead of the previous Finding of Negligible Adverse Impact, or FONAI.

Mayor Jeni Arndt expressed concern about a “daisy chain of layering regulations” but was relieved that some of the amendments narrowed the scope of the rules.

“It used to say that anyone who does a project that could impact water or our river, they have to get a permit from us,” she said. “That was not in there this time, and that was my biggest concern.”

The rules have to be crafted in a “fair, predictable manner” because “we’re going to have to comply with it, too,” Arndt said. “There’s no exempting ourselves.”

She told staffers that “I need reassurance that these 1041 regulations are to protect our natural areas and our open space while allowing permits and projects to come through, including our own. We need to, as a city, design a permitting process that, if it’s good for one project, it’s good for all projects. Give me some assurance that these rules and regulations will be written in a manner that’s designed to permit projects, not block them.”

Staffers responded that the process incentivizes applicants to avoid critical natural resources when planning a project.

Referring to charges that the new rules specifically target NISP, Councilmember Julie Pignataro said that “when we started studying the 1041 process, it wasn’t to stop a particular project, but a particular project showed a flaw in our process. For me, my main concern has always been that our natural areas remain as undisturbed as they possibly can, but also that there is a predictable path forward for these projects that need to happen for our region in general.

“This does not kill any kind of project,” she said. “It puts parameters around a project so that it doesn’t hurt the things that make our community great.”

Councilmember Shirley Peel said she had a different approach.

“We do want to protect our natural areas. We do want to have control over what happens in our city,” she said. “But I think what people forget is that, in my district, we’re actually on the Fort Collins-Loveland Water District. I was elected to represent District 4. This has adverse effects on the Fort Collins-Loveland water district, which serves my district. 

“This is a time when regional partners need to be working together to address water issues,” Peel said. “This is just another barrier to regional cooperation, which is what we need now more than ever.”

Peel’s was the only “no” vote on first-reading approval of the regulations, which would amend the Fort Collins Land Use Code to include 1041 regulations.

Arndt said more amendments are possible before the council considers the issue on second and final reading, which is likely at its next regular meeting May 16.