ALAMOSA — The City of Alamosa moved forward this week with measures to comply with pending groundwater regulations.
Alamosa’s municipal water supply is provided through city-owned wells that will be governed by new groundwater regulations filed by the State Engineer in water court and that are currently pending appeals and a water court trial before going into effect.
The city, like all other well owners whose wells are regulated under the rules because of their size, must make up for the injurious depletions its well pumping causes surface rights in the Rio Grande Basin (the San Luis Valley.)
One way the city is making sure it has enough water to augment its injurious well pumping is by purchasing water, an expensive proposition. All told, city officials expect to spend as much as $4 million to comply with the pending well regulations.
The council this week approved a resolution designating portions of the Alamosa Ranch essentially as collateral for $4.3 million lease-purchase financing that will cover the water augmentation costs.
The ranch encompasses 1,285 total acres of which about 970 acres will be used as collateral for the financing.
Alamosa City Attorney Erich Schwiesow said some of the ranch areas that have been excluded from this are the approximately 60 acres along Highway 17 that would be the most developable portion of the ranch, the Blanca Vista Park and Frisbee golf course. Schwiesow explained that using the ranch as collateral for the lease purchase does not change the use of the property, which is primarily used for ranch operations.
“There’s no change to the ranch management plan,” he said.
Schwiesow also explained that the water rights associated with the ranch on the Independent and Excelsior Ditches are also part of the backing for the lease-purchase. These are surface water rights.
City Councilman Charles Griego said the water rights on the ranch are probably more valuable than the land.
“You are correct, the value of the water on the ranch is greater than the value of the bare dirt without the water by more than a factor of two,” Schwiesow said.
He explained that the ranch was appraised at nearly $5.8 million with the water alone valued at $3.5-3.9 million.
Griego also questioned the move to go with a Denver-area bank to handle the lease-purchase financing rather than local banks, which he had encouraged. Griego said he wanted local banks to have a chance to participate in that $4.3 million project and had spoken with three bank presidents, two of whom said they never received the package to bid on.
“4.3 million is a lot of money to send out of the community,” Griego said. “I am one to say let’s keep that money here.”
He said the local banks give back a substantial amount to the local community.
He said he believed the city owed it to Alamosa and the San Luis Valley “to see that we keep that money here.”
He added that the bank in Denver would not be spending a nickel of the money here.
City Manager Heather Brooks said that the city staff made sure their directions were clear to the intermediary setting up the financing to give the local banks an opportunity to participate.
She said the local banks had that opportunity and could have combined their efforts to provide a collaborative proposal that the city would likely have reviewed favorably. However, only one local financial institution submitted a proposal and it was not for the total $4.3 million and not at a fixed rate, which did not meet the city’s needs, Brooks explained.
Time is of the essence, so the city had to move forward, she added.
“We wanted to make sure all the local banks had every opportunity to participate, and they made the choice not to,” Brooks said.
“They were prepared to come together, were going to put something together,” Griego said, “but I guess that’s water under the bridge.”
Alamosa Mayor Josef Lucero said the staff did their due diligence.
“It’s incumbent on us to support staff in this area and move ahead,” he said.