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Districts seek additional Dry Gulch land

Though no one can predict when or to what degree a proposed Dry Gulch Reservoir will ever be built, two local water districts are working tirelessly to acquire rights to another 131 acres deemed necessary to accommodate a 35,300-acre-foot impoundment.

The San Juan Water Conservancy District (SJWCD) and Pagosa Area Water and Sanitation District (PAWSD) boards of directors met in joint session Monday afternoon, with talks centering around acquiring rights to flood land owned by the Laverty family two miles northeast of Pagosa Springs. While uncertainty appeared paramount throughout the discussion, both boards and their attending legal counsel appeared intent on assisting the Lavertys in creating two separate conservation easements on their property, with hope of eventually acquiring fee title ownership of the inundated portion.

During a Tuesday phone interview, Southwest Land Alliance (SLA) Executive Director Michael Whiting explained that some menbers of the Laverty family prefer to maintain fee title ownership of their respective parcels, while qualifying for “tax treatments” for the sacrifice of development rights there. According to Whiting, conservation easements are the appropriate mechanisms to achieve those desires.

By agreeing to conservation easements on Laverty land, Whiting said the districts will also gain the right to store water up to the 7,400-foot contour line — a level that would constitute a reservoir of 35,300 acre feet. Though few people envision the need for an impoundment of that size in the foreseeable future, the districts feel it prudent to plan for the maximum allowed by court decree.

Problem is, the original court decree, which initially granted the districts sufficient water rights to develop a 35,300-acre-foot lake, has been appealed by Trout Unlimited multiple times. While both sides await yet another decision by Judge Gregory G. Lyman of District Court, Water Division 7, State of Colorado, the court has already reduced district water rights to allow a reservoir of just 25,300 acre feet, including 6,300 acre feet currently held by the SJWCD.

Nevertheless, as previously guided by former SJWCD board president Fred Schmidt, the districts believe they must secure a site adequate for expansion, should future growth dictate a need for additional water storage. To do so, according to Whiting, the districts’ only two options have always been to either grab the Laverty land through eminent domain, or agree to conservation easements that will prohibit any future development, other than the reservoir.

On Tuesday, Whiting insisted easements will give the districts what they need, while avoiding higher costs and the pubic relations nightmares associated with taking land through eminent domain.

Given two separate easements, they could eventually flood the portion up to the 7,400 contour line, while resting assured the land above 7,400 feet would not bring residential or commercial development along the Dry Gulch shoreline.

Meanwhile, the Lavertys will maintain land ownership, receive just compensation from the districts for their loss in development value, and gain valuable state tax relief. In the agreement, both sides will dictate protective terms regarding variables like adjacent land use, fencing and water quality control.

At Monday’s meeting, however, districts’ attorney Evan Ela expressed concern with what he envisioned as their agreeing to a “partner in their lake.” While referring to the SLA, who will hold, maintain and enforce the easements in perpetuity, he feared an SLA board 20 or 30 years down the road that could interpret the agreement terms differently.

Further, he suggested the districts try and find some way of eventually “purchasing” the easement on the inundated portion from the SLA. With that, they could eventually gain fee title ownership.

But, Whiting insists that’s not possible.

“Only a land trust can hold whatever easements are created,” he said. “The Lavertys selected the Southwest Land Alliance to do these easements. They could’ve used another land trust, but we’re the only game in town.

“The districts are a developer,” he continued. “No developers can ever hold an easement that encumbers a property that they themselves would develop, it’s illegal. Water districts can hold easements, but not on property they will develop, and Dry Gulch will be a development of that land.”

That said, it appears the only real option the districts have in eventually developing Dry Gulch to the fullest extent possible is to agree to the conservation easements as proposed. While Whiting was not at liberty to discuss the actual terms of the agreement, he explained that the districts will pay half the $50,000 cost of drafting the documents, while the Lavertys have agreed to pay the balance.

According to an SLA printed update on the project, the land trust completed a revised “Conservation Easement Deed Draft” and sent it to the Lavertys last Friday. The Lavertys have agreed to respond to the SLA within a week, at which time the SLA will edit the draft and deliver it to the Lavertys’ legal council within 24 hours.

Once the Lavertys and their attorney are satisfied with the document, the SLA will forward it to the districts for review. Whiting hopes to complete the final draft by mid-April.

chuck@pagosasun.com