Confluence: NoCo growth driving water price hikes

LOVELAND — Increases in the cost of water tied by booming growth along Northern Colorado’s urban corridor are driving price increases in other sectors, according to water-industry experts who say collaboration and innovation are keys to meeting the challenge.

“Housing drives the cost of water,” said Adam Jokerst, Rocky Mountain regional director for WestWater Research, during a panel discussion at the annual BizWest Confluence Colorado Water Summit today at the Embassy Suites hotel in Loveland.

Jokerst noted that 83% of all water transactions in Colorado are going to the municipal sector and that most of that is “concentrated in the northern Front Range. It’s the most expensive area to buy water in the state, and one of the most expensive in the country.”

The cost of Colorado-Big Thompson water units has risen 30% between 2015 and 2020, he said, while prices elsewhere in the state are remaining fairly flat. Moreover, he added, only about 10% of the remaining C-BT units are left to be transacted.

Jokerst said water can be up to 10% of the cost of a house, or $50,000 of the overall cost of a $500,000 house. Amortized over a 30-year mortgage, he added, “that’s about $300 a month. But residents just don’t see that. They just see the cost of water on their monthly bill, which is maybe around $70.

“The cost of water is greatly exceeding the cost of housing,” he said. “The difference is big, and it’s growing.”

An example of that exponential growth is the town of Severance, where the population has grown from 106 in 1990 to nearly 11,000 today, said Town Manager Nicholas Wharton. For years, just one pipe fed water to the town, he said, and even today it has just one source of treated water.

Like other rural communities east of Interstate 25, Wharton said, “we’re often not included in regional planning. We have to make sure we’re self-dependent.” Severance will institute its first-ever water master plan in 2023 and plans to have 2.5 million gallons of storage by 2024. 

The town had to place restrictions on developers and builders and cut $2 million from its annual budget because of the resulting lowered growth projections, he said. That has driven up the cost of housing, which had been $30,000 to $50,000 less than in larger nearby cities.

The town has more than double the amount of water it needs in actual shares, Wharton said. “It  hasn’t been the supply issue; it’s been the delivery issue, the treatment.

“It’s still a critical need for joint efforts regionally for water planning throughout Northern Colorado,” Wharton said. “We need to stop thinking big towns or little towns. We need to work as a region to make sure everybody is working together for our water into the future.”

Eli Kolodny, partner and technical director for Odell Brewing Co., added that the diminished share of water available to agriculture puts price pressure on his product as well because “beer is an agricultural product. That 7% left for ag is a huge impact on this industry.

“Our inputs, our raw materials are highly driven by water use,” he said. “That transition that has put price pressure on our raw materials translates into our finished goods. Because water is so embedded into our industry, it has a compounding effect on our sector.

“How can we continue to grow with a shrinking piece of the pie?”

Kolodny said Odell uses about 3.4 gallons of water for every gallon of beer it produces because of cleaning needs, equipment maintenance and public use, but that the brewery is developing strategies for using gray water in ways that can help it conserve.

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