At a Nov. 14 work session and special meeting, the Pagosa Area Water and Sanitation District (PAWSD) Board of Directors expressed its displeasure with the San Juan Water Conservancy District’s (SJWCD’s) rejection of an offer to buy Running Iron Ranch.
The board also considered a variety of potential measures to take against SJWCD, including a vote of no confidence in the district’s leadership of the Dry Gulch reservoir project.
The SJWCD has been the leader of the reservoir project since the 2015 signing of a three-way agreement between SJWCD, PAWSD and the Colorado Water Conservation Board (CWCB) for management of the reservoir project.
The special meeting concluded with an argument between members of the PAWSD board and SJWCD president Candace Jones.
The work session began with discussion of SJWCD’s history with the project and a potential vote of no confidence in the SJWCD as project leader for the reservoir project.
PAWSD board member Glenn Walsh opened the conversation by outlining the history of the three-way agreement, where PAWSD assumed responsibility for paying for the debt on the Running Iron Ranch while SJWCD was tasked with recruiting partners for the reservoir.
He continued that the SJWCD has not found any partners for the reservoir project and, at its most recent special meeting on Nov. 7, chose to reject the first potential partner for the project, a buyer for the property who Walsh claimed might be willing to build a “reasonably sized” reservoir on the property for public benefit.
At an Oct. 30 meeting, the PAWSD board voted to instruct the potential buyer to submit their offer to the SJWCD board for consideration.
Walsh added that PAWSD is currently considering this potential buyer’s offer to purchase the property, which would pay off the loans on the property, as well as a grant from CWCB that would have to be repaid if the property is sold and the reservoir project is not continued.
Following PAWSD board member Bill Hudson highlighting that the 2015 agreement was partially driven by SJWCD’s difficulties with potentially repaying the grant from the CWCB, Walsh returned to the SJWCD rejecting the purchase offer, which he said was “not even really given a hearing.”
He stated that the potential buyer, in their offer letter to the SJWCD, stated that they would be willing to discuss or negotiate the terms of the offer, but that the SJWCD did not discuss it with them and instead, following an executive session, chose to reject the offer.
Walsh added that the potential buyer was not told the time of the SJWCD special meeting and, when they joined the meeting on Zoom, were ejected from the meeting reportedly due to not having a recognizable phone number.
Walsh then highlighted the potential benefits of the offer, including the potential buyer’s interest in building a reservoir, and interest in working with the state and hiring his own grant writer to help move the project forward.
“And all you needed to do to begin to know that, that, at least, this is a person we can really deal with in a real win-win-win way is listen to him and not scoff at the offer,” Walsh said. “And to me, this is the last straw. If you can’t find a partner … and then you simply dismiss and scoff at a very legitimate possibility, I feel, and not today perhaps, give it some time, but at some point I think this board should consider issuing a declaration of no confidence in San Juan as the project leader.”
Hudson argued that, according to the three-way agreement, the SJWCD is required to consult with PAWSD on efforts to move the reservoir project forward and that it did not consult with PAWSD prior to rejecting the offer and being “disrespectful” to the potential buyer.
He added that, in his view, the SJWCD has violated the three-way agreement.
PAWSD board member Gene Tautges commented that PAWSD and the SJWCD have similar goals and desires to ensure that the community has sufficient water, but that PAWSD cannot consider water for recreation, fishing and other uses in its goals.
Tautges noted that PAWSD has done work planning for future water supply in the community and that he does not “get” claims that PAWSD is not doing sufficient water planning.
He also pointed out the high cost of a potential reservoir and stated that building a dam and a pump station would likely cost $200 million and create $400 a month water bills for PAWSD customers.
Walsh reiterated his concerns about the SJWCD not finding partners and then rejecting the purchase offer without sufficient consideration.
Hudson added that he spoke to the potential buyer after the rejection and they are “waiting to see what happens,” have not withdrawn the offer and are willing to have the SJWCD “change its mind.”
Walsh commented that the PAWSD board would likely not need to move forward with any of the actions it was considering if the SJWCD changes its position.
He added that he was “flabbergasted” by the SJWCD’s rejection of the offer and that he would not be willing to consider the SJWCD as the leader of the reservoir project if it does not negotiate with the potential buyer.
PAWSD board president Jim Smith echoed Tautges’ argument that PAWSD has to focus on a narrow set of water uses.
Walsh noted that, despite PAWSD paying $252,000 on the loans for Running Iron Ranch annually, it is not significantly reducing the principal on the loans due to accumulating interest.
The board then discussed what action it should take, with Walsh arguing that the board should wait to take action, potentially until the beginning of 2025, to see if the SJWCD reconsiders its position.
He added that the board would also likely need to gather further documentation prior to a vote of no confidence in the SJWCD as project leader.
No objections to this approach were raised by other board members.
The board then discussed if the PAWSD Running Iron Ranch subcommittee should be empowered to continue negotiations with the potential buyer and other water organizations to construct a reservoir even if the SJWCD is unwilling to participate.
Hudson commented that he has been opposed to the Dry Gulch reservoir since 2008, but that the potential buyer is willing to build the reservoir without PAWSD paying for it and that he is willing to work with the potential buyer to construct a reservoir.
“I am the biggest opponent since 2008 of this project and I will work with this guy because I believe that what he wants is … water security for our community,” Hudson said. “And God bless him for that.”
Walsh added that he would also be willing to work on building a reservoir.
Tautges questioned if the SJWCD would be willing to consider the offer if the buyer committed to building a reservoir on the property.
Jones then attempted to enter a correction about the nature of the reservoir included in the proposal and to question why there was not a joint work session between PAWSD and the SJWCD, to which Walsh responded that the board was not entertaining comments and referenced the SJWCD refusing to hear a comment from Hudson at its Nov. 7 meeting.
Walsh reiterated his concerns about the SJWCD rejecting the offer, and Tautges added that he was “discouraged” or “appalled” about how the offer was rejected.
The board ended its discussion of whether or not to move forward on working with the potential buyer to build a reservoir by deciding to delay the discussion until a future meeting.
It then considered if it should make a declaration that it is selling the Running Iron Ranch, with Walsh commenting that the board is open to accepting offers and selling the ranch, and expressing hope that the SJWCD would also open negotiations with a potential buyer of the property.
He added that, if the current offer is rejected by the SJWCD, then he would want to move forward with a declaration that PAWSD is selling the ranch.
Hudson commented that a declaration would mean that PAWSD is seeking the best offer for the district while he is currently focused on working with someone willing to build a reservoir.
Walsh and Hudson both stated that they would prefer to pursue the current offer, although they might change positions if the SJWCD does not reconsider its rejection of the offer.
The board moved on to discuss if it should disclose to potential funding agencies for the reservoir that PAWSD is pursuing selling the ranch.
Hudson commented that this item should potentially not be discussed as it would not contribute to the “positive energy” needed to “turn this thing around.”
However, Walsh commented that disclosing this position is necessary so that funding agencies will be informed about the potential sale.
Following a discussion of if the water rights currently held by the SJWCD could be sold or transferred, Walsh reiterated his position that, if the SJWCD does not reconsider its position, then funding agencies would need to be informed that PAWSD is selling the ranch to ensure that PAWSD keeps a positive relationship with them.
PAWSD board member Alex Boehmer commented on the high cost of the reservoir and his desire to prevent the PAWSD customers from paying for a reservoir, especially given the other costs of living in the area.
Tautges also commented that PAWSD does not need an additional reservoir.
Following a lengthy discussion of the drawbacks of building a reservoir at Running Iron Ranch, the discussion moved to the issue of if the PAWSD board should form a public outreach subcommittee regarding the sale.
Hudson commented that the SJWCD is performing public outreach about the sale.
He added that creating this subcommittee is not related to the present offer to buy the ranch, but is motivated by the PAWSD board being publicly criticized.
Hudson concluded that he would like to discuss how to create an outreach committee at the board’s December meeting to defend PAWSD’s positions.
Tautges commented that the district is prepared for additional growth and has plans in place to ensure that water is available to service this growth.
Walsh stated that public outreach should be “extremely fact-based” and should explain the district’s position.
The board then briefly discussed if it should act on any of its agenda items in a special meeting, with Boehmer advocating for giving the SJWCD time to reconsider its position.
Hudson moved to end the work session and open the special meeting, which passed unanimously.
After opening the special meeting, Hudson moved to table the special meeting agenda to the board’s December meeting, which passed unanimously.
The board then discussed if it should hear public comments at the meeting.
Hudson highlighted that he was not allowed to ask a question at the Nov. 7 SJWCD meeting, which he suggested was “very unpleasant.”
“There are people here who have come to the meeting and they may have comments and I wasn’t treated well, but I’d like to treat them well,” Hudson said, adding that would encourage Smith to open the meeting for public comments.
Boehmer commented that he would be willing to hold a joint meeting with the SJWCD if they discuss the offer to purchase the ranch with the potential buyer but that, until this happens, a joint meeting would be “pointless.”
Walsh commented that PAWSD’s attorney was concerned that discussions about the ranch, especially discussions involving public comments, could lead to “mudslinging.”
He added that he would not want to hear public comments at the meeting, although he noted that the board would hear public comments at its next regular meeting where it might consider actions directed toward the SJWCD.
After commenting that the SJWCD only allows for public comment at the beginning of its meetings and does not allow further public input afterward, Walsh said, “I would like to leave this meeting where it is and not create any rancor and leave open the space for cooperation between the offeror and San Juan.”
Boehmer reiterated his confusion about why the SJWCD did not consider the purchase offer.
Hudson commented that the two members of the SJWCD board in the audience could tell the PAWSD board why it rejected the offer.
Smith then asked the board members if they wanted to speak to the PAWSD board.
Jones began her comments by noting that the PAWSD board had not allowed her to speak at a recent special meeting and noting that the SJWCD does not have discussions with public commenters at its meetings.
Walsh questioned why it does not do this, pointing out that the SJWCD board members are appointed not elected and asked, “Wouldn’t you feel more of an obligation to invite the public to question you when you don’t even have to submit yourself for an election?”
Jones replied that this is the board’s practice, which could potentially be reconsidered, but that this was not the topic the PAWSD board asked her to speak on.
She explained that she left the Oct. 30 PAWSD meeting with uncertainties about who the potential buyer the PAWSD board directed to send an offer to the SJWCD was.
Following a brief argument about whether Walsh made an effort to inform Jones about who the offer would be from, Jones continued, stating that she understood from the PAWSD meeting that the offer would include building a reservoir and that the SJWCD board did not read the offer as including reservoir construction.
She stated that the offer appeared to involve the creation of a private lake and that the board rejected the offer.
Following this, Jones added that the board confirmed that the offer involved a private lake with the potential buyer.
Tautges commented that, if the SJWCD board had discussed the offer with the buyer before rejecting it, it might have had further information.
Jones replied that the board also might have had more information if PAWSD had included the SJWCD in its negotiations.
She then discussed the water rights for the property, saying that the SJWCD is not allowed to sell its publicly owned water rights to a private developer “whose intention is most likely to … put a few McMansions up there in front of their private lake.”
Jones commented that the SJWCD is not opposed to a private-sector collaborator on the reservoir, but that such negotiations would be complex and would take significant time, while the potential buyer “wants to close in six months.”
Walsh questioned how the district could learn the information it needs if it does not speak to the potential buyer.
Jones commented that PAWSD’s position appears to be that “there should be no growth in this community.”
Tautges noted that is not PAWSD’s position.
Jones replied that Tautges stated that PAWSD would not consider expanding infrastructure unless properties come with water rights.
She added that this is an “important message” to the community.
Tautges commented that PAWSD does not have a marketing department and that, if groups want to join the PAWSD system, they should “pay their own way.”
Jones argued that additional water planning and discussion of how water needs will impact growth is needed in the community.
“What I’m hearing from you right now is that the partner you want is the PAWSD customer’s pocketbook,” Walsh said.
SJWCD board member Charles Riehm entered the conversation, stating that both boards want to do “the right thing.”
Riehm added that he spoke to the potential buyer following the Nov. 7 SJWCD meeting and the buyer acknowledged that him being ejected from the meeting was due to an error on his part.
Riehm and Walsh then disputed the SJWCD’s policy that attendees calling into a meeting should identify themselves.
Tautges commented that Jones appeared to be insinuating that PAWSD has done a poor job of planning.
Jones questioned if PAWSD knows what water conditions will be like in 20 years given climate change.
Walsh responded that Jones had “gone too far” and that she was asking people to “make things up.”
JR Ford, representative from the Southwestern Water Conservation District (SWCD), then made a statement, stating that the organization would want to know how the boards plan on handling the water rights that the SWCD transferred to the SJWCD if a sale occurs.
He continued, noting that he was now speaking as a member of the public, to comment on how the boards are “dysfunctional” and how the SJWCD’s comments about being open-minded are “disingenuous” given the board rejecting a potential purchase offer without discussing it with the potential buyer.
He commented that the size of a potential reservoir is often inflated by board members having “pet projects” that enlarge the reservoir.
Jones stated that she wants to have that discussion.
“But ,you know what, I don’t think your board does,” he replied.
He commented that the community wants a reservoir sized for community needs and built when needed by the community and that the board rejecting the offer is “sad.”
He added that many of the concerns about a reservoir and water supply are overly speculative and prevent action being taken.
Jones stated that she does want to get work done on the project.
Smith moved that the board should adjourn the meeting.
Boehmer seconded the motion to adjourn the meeting.
Walsh stated that he had a comment related to public outreach.
He explained that the offer for purchasing the ranch was submitted to the SJWCD on a Friday and that, in the next issue of The SUN, a letter to the editor from “one of Candace’s good friends and … fellow political activists where lo and behold she talks about offers that might be coming for private lakes with McMansions around them and I’m wondering how your private lake with McMansion got to your political confederate?”
Jones replied that she did not “prompt that letter” and that it was written prior to her knowing that the SJWCD would receive an offer for the property purchase.
“So, don’t sit here in a public meeting and accuse me outright of planting a letter in The SUN because other people happen to care about water and follow some things that are going on,” Jones added. “It didn’t come from me, Glenn. That is the truth.”
Walsh questioned why Hudson is getting “insulting comments” when he writes a series of articles.
Jones replied that she does not read Hudson’s work or comment on it so she is “not responsible for that.”
“You shut him down, three words; you held the floor for 15 minutes,” Walsh said. “You’re very good at that, that’s fine. But why does he receive a series … of insulting emails … from a spouse of one of your board members relating the conversations that went on and why it was decided to reject the offer inside the executive session.”
Jones reiterated that she does not read Hudson’s work and that Walsh is welcome to ask the “person that wrote that” if he feels the comments are inappropriate.
Walsh asked if Jones is concerned about “behavior like that.”
She replied that she would not respond to something that she had not read.
The board then adjourned the meeting while Jones commented that it was “unfortunate” that the organizations cannot have a “civil conversation.”
josh@pagosasun.com
