On Monday, Pueblo City Council will consider an intergovernmental agreement (IGA) with Pueblo West that could become the basis for a regional cooperation plan.
Under the IGA, Pueblo West would pay $1,500 to the City of Pueblo for every new water tap issued in Pueblo West in the next five years.
It is important all of Pueblo County understand how this proposal came to be and why. If there is to be future regional cooperation, the agreement must be adopted by both Pueblo City Council and the Pueblo West Metropolitan District, whose directors will consider it at a later date.
The citizens of Pueblo pay for and own the best municipal water supply in Colorado – perhaps the best in the entire southwestern United States. To say that this water supply is key to our economic future is no overstatement.
Under our city charter, Pueblo’s water supply is managed by the independently elected Board of Water Works (BOWW), which has done an outstanding job of planning and ensuring our ability to grow is not limited by our water supply. It has diversified our water portfolio to make Pueblo less reliant on water from the Western Slope, which is becoming less reliable due to the Colorado River basin drought. Between 2009 and 2011, the citizens of Pueblo spent $70 million to acquire 28% of the Bessemer Ditch to reduce reliance on Western Slope water.
The City of Pueblo is the economic center of Pueblo County and benefits from increased economic activity throughout the county. For the last two decades, most of the residential development in Pueblo County has been in Pueblo West. Of the 731 residential building permits issued in Pueblo County last year, 428 were in Pueblo West and 197 in the City of Pueblo.
A 2019 study found Pueblo West did not have an adequate water supply for its population.
Unlike nearby Fountain, which has issued a moratorium on new residential construction because they do not have a permanent water supply for new growth, Pueblo West has continued growing. There are currently more than 6,000 undeveloped lots in Pueblo West. If there is a moratorium on new homes in Pueblo West because of a lack of water, much of that growth would move to Pueblo.
In 2021, the BOWW entered into an agreement to provide Pueblo West with 1,560 acre feet of water so the district would not have to impose water restrictions due to the drought. One acre foot supports about three households per year. Last month, the BOWW and Pueblo West entered into a five-year lease of 1,500 acre feet of water to allow Pueblo West to continue to grow while it attempts to perfect its Hill Ranch water rights.
In 2001, Pueblo West purchased approximately 1,800 acre feet of water from the Hill Ranch in Chaffee County. In 2006, Pueblo West obtained a court order, allowing it to use the water if they met certain conditions related to revegetation of the land that would be dried up on the Hill Ranch through that water use. They have been unable to fulfill those requirements and the 2019 study concluded they had encountered “serious unexpected obstacles” in meeting the requirements. Because they have not been able to use the water they purchased in 2001, Pueblo West requires assistance from the City of Pueblo to continue to grow.
I know the citizens of the City of Pueblo would like to be good neighbors with Pueblo West, but at what cost? For every $400,000 home built in Pueblo West instead of Pueblo, the City of Pueblo loses approximately $5,900 in sales tax on the materials used in construction. With 428 houses built in Pueblo West last year, that equates to more than $2.5 million in lost sales tax revenues.
Meanwhile, the cost for Pueblo West to acquire a permanent supply of 1,500 acre feet of water in the market today would exceed $45 million.
The proposed IGA requires Pueblo West to pay $1,500 to the City of Pueblo for each new water tap issued while the district uses the City’s water. These funds would be used by Pueblo to subsidize infill development and affordable housing. The payment would partially compensate the city for lost sales tax as new homes are built in Pueblo West instead of Pueblo.
Pueblo West would also pay the BOWW $1.2 million per year for the water. Although the BOWW has previously leased water to other municipalities in Colorado, this is the first time such a lease has taken place in Pueblo County. It is the first time the water lease has an adverse effect on sales tax in the City of Pueblo.
The IGA attempts to utilize the benefits of Pueblo’s water supply for all the parties in Pueblo County. The lease allows Pueblo West to continue to grow, and provides income to the BOWW to keep water rates low. The IGA also partially compensates the City of Pueblo for lost sales tax revenue.
The previously entered water lease and this IGA are a short-term solution to the water woes in Pueblo West but can be the beginning of a permanent solution, which considers the economic realities of the use of Pueblo’s water for continued development in all of Pueblo County.
As such, in the spirit of regional growth and cooperation, the IGA should be approved by the Pueblo City Council and the Pueblo West Metropolitan Board.
Nick Gradisar was elected mayor of Pueblo in Jan. 2019. Prior to holding that role, the native Puebloan practiced law for 40 years and, among other community activities, served on and led the Pueblo Board of Water Works.
This article originally appeared on The Pueblo Chieftain: Pueblo wants to be good neighbors with Pueblo West, but not at any cost