Sharing the wealth (and pain) 

Springs Utilities considers allowing others to join its water pipeline project

Looking to capitalize on its planned $1.1 billion investment, Colorado Springs Utilities soon might invite new partners to join the Southern Delivery System water pipeline project.

All concerned say that cooperation would help water districts that rely on dwindling groundwater supplies, while stemming sharp rate hikes for Utilities' customers in coming years. From now until 2016, when water is first delivered, rates will increase 12 percent a year. And that's just for half the project; the other half, which includes a reservoir, will be built later.

If other communities pay to piggy-back onto the pipeline, say some city officials, everybody wins.

"That's the whole goal, is to use that pipeline to its maximum capacity to reduce the impact of SDS on ratepayers," Vice Mayor Larry Small says.

But there are plenty of hurdles to jumping aboard, including cost and regulation.

Room for partners

Since SDS was conceived in the mid-1990s, Fountain, Security and Pueblo West have joined to help fund a tiny portion of the project. Security, Fountain and Colorado Springs will share in the pipeline's 78-million-gallon capacity. (Pueblo West will draw water from a separate pipeline.)

But recent analysis shows the SDS pipeline won't be fully used year round, says Gary Bostrom, with Utilities' water services division. Between November and April, when water demand is low, consumers will use 10 million to 20 million gallons a day from Pueblo Reservoir. That leaves plenty of room for more water to be pumped into storage, whether for pipeline customers or others, to be used during summer months, Bostrom says.

"There is ample space in Southern Delivery for regional purposes," he says.

That's music to the ears of Kip Petersen, general manager of Cherokee Metropolitan District, which boosted rates by 87 percent in January to fund a stop-gap water contract with Utilities.

Cherokee, a six-square-mile area east of Powers Boulevard, is struggling to serve its 18,000 residents after losing 60 percent of its water rights in legal decisions. (The district has since sued its former attorney, Pete Susemihl, alleging bad legal advice. The case is pending.)

For three years, it's purchased about a quarter of its water from Utilities on an "emergency basis." Utilities is hoping to get City Council's approval on a two-year agreement in which Utilities would supply Cherokee with up to half its water, but charge a 173 percent higher rate. (Hence, the district's water-rate hike.)

Petersen is hoping that longer-term, the parties can work out a deal in which SDS would deliver water the district has yet to acquire to a nearby reservoir, ideally, the 30,500-acre-foot Upper Williams Creek Reservoir planned by Utilities. The reservoir is planned for a site 14 miles southeast of the city near Bradley Road.

Petersen knows obtaining water rights, pumping them here and creating storage won't come cheap.

"What we're really working towards is a long-term approach to everyone's benefit," he says.

Many obstacles

Bostrom insists the city doesn't intend to sell its water rights, only to deliver water for others. But even that might bring a squall of costs and red tape.

First, city codes restrict water service to within the city limits or to subdivisions agreeing to be annexed. To accommodate outlying partnerships requires changes to the code, and perhaps the City Charter.

Second, Pueblo Reservoir storage contracts are available only for those entities located within the Southeastern Colorado Water Conservancy District, a multi-county area that's been taxed for years to build and maintain the reservoir. Some subdivisions interested in SDS don't lie within the district, Utilities officials say.

Then there's return flows. Fountain Creek is subject to government protection against pollution and erosion.

Lastly, the Bureau of Reclamation, which runs Pueblo Reservoir and permits water projects, might need a say-so about new partners' plans, such as Petersen's idea to enlarge Upper Williams Creek reservoir.

That would take time and money. Colorado Springs' arduous application process, which included a National Environmental Policy Act study, took nearly six years and cost $19 million. Bostrom says the city will try to recoup a portion of that from any future partners, and Utilities spokeswoman Janet Rummel says SDS construction costs also could become part of any partnership deal.

Philosophical debate

City officials assert that regional economic vitality and stormwater management depend on regional water cooperation. Detractors wonder whether pumping water to outlying areas and sparking development there will foster "sales tax creep" and erode the city's sales tax revenues.

"I don't buy that," Small says, noting that the Eighth Street Wal-Mart told him their sales didn't decline after another Wal-Mart opened in Woodland Park in 2007.

A fly in the ointment is a recent analysis showing that if the city's 200 square miles are built out in 30 to 40 years, the city will need 17 million gallons more water than SDS can deliver. The city's federal application predicted SDS would satisfy needs through 2046.

That leads Wayne Vanderschuere with Utilities' water services division to warn, "I would be concerned about making promises that we may not be able to keep."

The City Council is expected to receive recommendations on regional water partnerships from the Utilities Policy Advisory Board in April.



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