GLENWOOD SPRINGS — The directors of the Colorado River Water Conservation District supported a recommendation Tuesday from General Manager Andy Mueller to research asking voters in November 2020 to restore a portion of the district’s original property-tax rate, or mill levy, and increase its annual revenue from $4 million to $8 million.

In February, the 15-member river district board was leaning toward asking voters this November to remove the revenue restrictions imposed upon it by the Gallagher Amendment, which was seen as easier to pass than a direct tax increase.

But now the residential taxing rates set by Gallagher appear to have stabilized, putting off a potential $370,000 hit to the river district’s budget for two years. Plus, there may now be a competing water-funding question on the this year’s ballot. So the district is now looking to 2020.

“It alleviates the immediate threat but not the long-term threat to the river district’s property tax-based revenues,” Mueller said of the stabilized Gallagher rate.

The district gets 97% of its revenue from property taxes on residential and commercial property, and the Gallagher rates that were expected would have cut the district’s revenue by 15%.

Mueller said it now makes more sense to ask for an increase in its mill levy from 0.252 mills to 0.5 mills — and possibly to ask voters to eliminate the revenue restrictions in the Taxpayer’s Bill of Rights, or TABOR, and include a sunset provision of 10 to 15 years.

“If the voters were to authorize the district to increase its mill to .5, the district could actually do significant work toward meeting its mission, in terms of protecting and developing and conserving the water resources of the Western Slope,” Mueller told his board on April 16. “Today, we do a very good job of providing technical advice, legal representation and advocacy, the part that has been left out is actual meaningful cash contributions to projects and efforts by our constituents.”

In his April general manager’s report to the board, Mueller said “an increase in the mill levy to 0.5 would raise approximately 4.1 million dollars in additional revenue annually and enable the district to bring significant financial assistance to our consumptive and non-consumptive water users to conduct conservation, efficiency and rehabilitation projects as we all adapt to the changes in our precipitation patterns and flow reductions in the rivers.”

During the board meeting, Mueller also said “we would want to be very specific about the types of projects and how we would use the funds, and how this district would serve its mission.”

If the board does nothing, Mueller said the combined effects of Gallagher, TABOR and a shrinking oil-and-gas sector in western Colorado will cause the district’s property revenue to be less than its expenses, even with more cuts of staff, expenses and the district’s water-project grant program.

“The board and staff are concerned that the perfect storm of negative economic events and constitutional amendments will create a situation where we will be unable to meet our mission,” Mueller said. “We’ve been granted a reprieve to think about it and figure it out, but we are really concerned about having adequate financing to meet our mission.”

The river district was created by the state legislature in 1937 to protect and develop water supplies in 15 Western Slope counties, including Pitkin, Eagle and Garfield. County commissioners appoint its directors to three-year terms.

The organization works on shaping state and regional water policy, securing and using Western Slope water rights, operating two reservoirs, managing grants for irrigation efficiency measures, and other initiatives related to the Colorado River and its tributaries.

14 of the 15 directors of the Colorado River Water Conservation District, gathered for their January 19 meeting. The directors are appointed by county commissioners in 15 Western Slope counties. Back row, L to R, Alden Vanden Brink, Rio Blanco County, Karn Stiegelmeirer, Summit, Doug Monger, Routt, Marc Catlin, Montrose, John Ely, Pitkin, Steve Acquafresca, Mesa, Bill Trampe, Gunnison, Stan Whinnery, Hinsdale. Front row, L to R, Mike Ritschard, Grand, Kathy Chandler-Henry, Eagle, Dave Merritt, Garfield, Martha Whitmore, Ouray, Tom Alvey, Delta, Rebie Hazard, Saguache. Not shown, Bill Gray, Moffat County.

Betting on water

The river district board also got another reason to avoid this November’s ballot when a bill was introduced in the state legislature on April 18 to ask voters this fall to approve legalized sports betting.

The betting bill is relevant to the river district because it calls for a 10% tax on the gambling revenue, which a 2019 study estimated could be over $300 million, and most of the money is to be used to pay for water projects and programs. However Democratic House Majority Leader Alec Garnett said the expected revenue from a “relatively constrained” betting program would range from $4 to $10 million, according to the Associated Press.

“We want to see what happens on that statewide question,” Mueller said in an interview. “Statewide tax measures are really difficult. We don’t want to: A) get in the way of it and contribute it to being defeated; and B) be defeated in its wake. We don’t want to be pulled down with it, if that happens. But either way, we support the effort.”

Mueller serves on an ad-hoc committee made up of leaders from various sectors in Colorado that has been exploring financial options for funding water projects and programs, and reporting back to the state’s Interbasin Compact Committee about its progress.

“We’re not the architects of sports betting,” Mueller said of the committee.

The sports-betting bill, HB 19-1327, was co-sponsored by state Sen. Kerry Donovan, among others, and says 10% of the tax revenue from gambling is “to fund implementation of the state water plan and other public purposes.”

The state’s 2015 water plan is broad outline of how to meet the state’s water challenges, and does not include a specific list of projects or projects and their potential costs. When it is said that the money will “fund implantation of the state water plan,” it could mean many different things.

The bill does include, however, language that is consistent with a demand-management — or water-use reduction — policy adopted in November by the Colorado Water Conservation Board, a state agency in the Department of Natural Resources.

For example, the bill says the money could be spent “to ensure compliance with interstate water allocation compacts” and on “projects and processes that may include compensation to water users for temporary and voluntary reduction in consumptive use.”

The CWCB’s policy on demand management says the state agency will “investigate voluntary, temporary, and compensated reductions in consumptive use of waters that otherwise would deplete the flow of the Upper Colorado River System for the specific purpose of helping assure compact compliance.”

Stillwater Reservoir, on the Bear River, which flows into the Yampa River, is an example of a reservoir in the high country that can provide benefits for multiple users. The River District sees a need for more small reservoirs to serve various needs.

Western Slope needs

Mueller said even if the sports-betting bill passes, it might not meet the Western Slope’s water needs.

“We support a statewide effort, but we also understand the importance of doing things for ourselves on the Western Slope,” Mueller said. “And we understand that we can’t rely on others from the outside to do the things that we need to do to protect ourselves.”

Mueller cited examples of projects consistent with the district’s
mission but short on funding, including building a bypass channel around Windy Gap Reservoir to add a more natural flow to the upper Colorado River.

He said, as another example, that building small, multipurpose reservoirs in the headwaters counties could help provide water to ranchers, farmers and cities, well as to downstream sections of rivers and streams stressed by climate change.

“Last year was a perfect example of where our reservoir releases were able to bring down the temperatures in the Fryingpan, Roaring Fork and upper Colorado rivers,” Mueller said, referring to releases from Ruedi Reservoir on the Fryingpan River above Basalt. “Before we started releasing water, all of those rivers were dangerously close to getting to a point where the fish were going to start massively dying.”

Mueller looked to the district’s history for his mill-levy recommendation, saying Western Slope residents in 1937 went to the state legislature and asked that the river district be created with a mill levy of 2.5 so residents could manage, develop and protect the water supplies and also preserve the high-quality trout fishing on the rivers.

“Even back then, they talked about protecting the rivers. It was then recreation in terms of fishing, but that’s what they were looking for,” Mueller said.

Mueller said Western Slope residents knew it would be an expensive
venture, but they were willing to tax themselves at 2.5 mills.

“The values have all gone up, but it was the same impact proportionally on each property as 2.5 mills would be today, but we’re now at a tenth of that,” Mueller said.

Mueller said it can be frustrating to see the needs of the Western Slope, when it comes to water and communities, but not be able to take action.

“We’re at the table frequently with parties like the state, the feds, and sometimes NGOs, and they are all bringing the money, and we’re begging, and we’re pleading with them,” he said. “We don’t have the leverage, we don’t have the influence, because we don’t have the money. Yet the people of the west slope value those things that we are trying to preserve, including efficient, productive ag, as that is incredibly highly valued.”

Aspen Journalism covers rivers and water with The Aspen Times and other Swift Communications newspapers. This story was published by The Aspen Times, the Glenwood Springs Post Independent, and the Summit Daily.

Brent Gardner-Smith, the founder of Aspen Journalism, and who served as AJ’s executive director until August 2021 and as editor from 2011-2020, is the news director at Aspen Public Radio. He's also been...