The Pagosa Area Water and Sanitation District (PAWSD) Board of Directors Running Iron Ranch subcommittee and San Juan Water Conservancy District (SJWCD) board members held a joint work session to discuss potential options at the Running Iron Ranch on May 8.
Bill Hudson and Glenn Walsh attended representing the PAWSD board, while Rob Hagberg and Charles Riehm represented the SJWCD.
Discussion at the hour-and-a-half-long work session ranged over a variety of issues, including a proposed gravel lease extension, options for various activities to generate revenue on the property and the long-term positioning of both boards in terms of paying off the loans for the property.
The SJWCD board previously expressed opposition to the gravel lease extension proposed by Weber Sand and Gravel representative Donald Andrew “Andy” Weber to the PAWSD board.
However, Riehm explained that the board’s opposition was rooted in an understanding that PAWSD would generate a nominal amount of revenue from the lease extension.
Upon Hudson and Walsh explaining that the lease extension would potentially generate more than $100,000, which would help PAWSD offset the costs of paying the loans on the property and other cleanup work, Riehm and Hagberg both indicated that they would support such an arrangement as it would help reduce the financial burden of the property, and the associated reservoir project, on PAWSD.
The conversation also covered two proposed potential income-generating projects at the site, including an affordable mobile home park proposed by Walsh and a potential solar electricity generation installation with La Plata Electric Association (LPEA) proposed by Hagberg and Riehm.
Walsh explained that some local mobile home parks charge up to $1,000 per month for a home to be parked there and that a park could be located on a 20 acre section of the property that is across U.S. 160 from the main ranch.
He indicated that this property could potentially accommodate more than 100 “park model homes” and that, if the districts developed an affordable housing project at the location and could make between $150 and $200 in revenue from each home per month, this would generate $240,000 annually, which would come close to paying the loans on the property.
Riehm and Hagberg expressed support for the idea, adding that the proposal would be particularly valuable due to impacting the shortage of affordable housing opportunities in the area.
The group also discussed that this project could be paired with a park or rafting put-in on the San Juan River, which would also be located on the same portion of the property.
A proposed deal between the two districts and Archuleta County to create a park and public river put-in failed last year.
Walsh and Hudson noted that their primary concern with that proposal was that the county, which would have assumed responsibility for managing the park, does not have the appropriate resources to do so safely.
They also expressed concerns about extending the possible run for persons recreating with inner tubes that far above town due to the potential that a tube could rupture and the user could be stranded a significant distance from town.
However, they expressed a greater willingness to pursue such an arrangement if the put-in’s use is limited to licensed river rafting companies and if the arrangement for a put-in is made with them.
The group also covered the possibility that LPEA would be interested in creating a solar installation on a portion of Running Iron Ranch that would not be covered by the proposed reservoir.
Hagberg stated that he had previously suggested this idea to LPEA, but that the association had expressed little interest.
However, he explained, following the decision by the LPEA board to exit from Tri-State Generation and Transmission Association, which was partially driven by a desire to increase the amount of renewable energy used by LPEA, LPEA representatives approached him and expressed potential interest in moving forward with the solar farm proposal.
He stated that the portion of Running Iron Ranch proposed for the project could be ideal as it is on a hill and has no obstructions to the sky.
Hagberg added, depending on the terms of arrangement with LPEA — which could be formulated in a variety of ways — the project could generate significant revenues for the districts and assist with the loan payments, as well as providing benefits for the community by increasing the local electrical supply.
The group then discussed potential formulations of an agreement with LPEA and the ramifications of these options before agreeing that the group has an interest in the project and would like to pursue it further.
The discussion then turned toward the long-term ownership of the ranch and the PAWSD board’s potential interest in selling it.
Walsh and Hudson suggested that the ideal arrangement might be for the SJWCD to purchase the ranch from PAWSD, thus removing the district from any involvement with the reservoir project.
Walsh added that he believed that, with SJWCD’s increasing mill levy revenues, it might be feasible for the SJWCD in the future to support the loan payments for the property.
Riehm stated that he believes that it would be possible for the district to pursue financial approaches that would allow it to support paying the loans, though Hagberg expressed doubts about if the district would have the funds necessary to do so.
Walsh also emphasized that reducing the financial burden on PAWSD is a key goal of the PAWSD board and that options for generating revenue to support the loans on the property would likely need to be found quickly to prevent the PAWSD board from moving toward a sale.
Riehm and Hagberg expressed agreement with Walsh about the importance of reducing the costs for PAWSD, and Walsh added that he appreciates that the SJWCD highlighted the importance of reducing such costs in a recent meeting with the Colorado Water Conservation Board, who is the third party in a three-way agreement concerning the Running Iron Ranch property and the reservoir project.
The group also discussed the sizing for a reservoir and the relationship of this size to water demand, with Hudson noting water demand has not grown in accordance with the projections that originally fueled the development of a reservoir and Riehm commenting that the 10,000 acre foot reservoir size that the project was based upon was somewhat arbitrary and could potentially be re-examined depending on the needs and funding options for the project.
Hudson and Walsh noted that reducing the size of the reservoir could potentially increase the value of various revenue-generating options for the property, particularly the solar farm.
At the conclusion of the discussion, members of both boards expressed that the conversation had been positive and more productive than they anticipated and agreed to schedule another joint work session on June 12 at 10 a.m. at the SJWCD offices at 46 Eaton Drive, Suite 5.
josh@pagosasun.com
