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More than a water fight in Chaffee County

Essay by Ed Quillen

Local Politics – October 2006 – Colorado Central Magazine

ALTHOUGH MOST COUNTY OFFICES — clerk, treasurer, sheriff, etc. — are up for election this year, there’s only one hot race in Chaffee County. That’s the commissioner contest. You can tell from the proliferation of yard signs, either “Tim Glenn Again” or “People First: Bev Scanga,” that it dominates local politics in 2006. The only sign that might outnumber them is “Save Our Shelter: Vote Yes on 1A,” and that small property-tax increase doesn’t appear to be controversial (since I’ve yet to encounter anyone who’s against it).

In the hot race, Tim Glenn is a Democrat who has served one term as commissioner and is seeking reelection. Bev Scanga has served on the local school board and library board, and is now the Republican challenger for the commission seat.

But it’s more than a standard two-party contest. It’s partly a water fight, too. Glenn, along with his fellow Democratic Commissioners Jerry Mallett and Jim Osborne, voted to spend up to $500,000 to pursue a Recreational In-Channel Diversion (RICD) to protect flows on the Arkansas River in Buena Vista and Salida.

Beverly Scanga attacks that as a waste of tax dollars, since “This is money that is being thrown away because the County does not own any water and they do not have any storage space for water. Therefore the County has no way of putting any more water in the river than what is already there.”

Yet clearly the purpose in establishing water rights has never been to put water into the river. On the contrary, people generally file for a water right so that they can take water out of the river. RICDs, however, work a little differently. They provide for keeping water in the river — because that’s where recreational users need it.

Further, Scanga says on her web site, “We already pay taxes to the Upper Arkansas Water Conservancy District (UAWCD) to have them protect our water.” She does not, however, note there that her husband, Terry Scanga, is the general manager of that district; nor does she mention that the conservancy district opposed the county’s RICD filing.

Thus, this election could be seen as a altercation between the UAWCD and the Chaffee County Commissioners about who should control the water.

But the issues actually run far deeper than that.

Water is a public resource in Colorado. As our state constitution puts it, “The water of every natural stream …. within the state of Colorado, is hereby declared to be the property of the public, and the same is dedicated to the use of the people of the state….”

But there isn’t enough water to do everything that everyone wants to do, so Colorado’s water has to be divvied up between towns, industries, farmers, ranchers, developers and downstream users from California to Arkansas.

RICDs ARE A RECENT DEVELOPMENT made possible because Colorado has come to recognize that the livelihood of tourism industries like rafting and fishing rely on keeping some water in our rivers. Yet our local water conservancy district led the opposition against getting one in Chaffee County.


Terry Scanga, the UAWCD’s general manager, gave me two reasons when I asked him about it a while ago. One was that the voluntary flow agreement among river users was working well enough, so why fix what wasn’t broken. And the other was that an instream-flow guaranteed through Buena Vista and Salida could interfere with changes in points of diversion, even though with a 2005 date, it would be a very junior water right.

People tend to zone out when the subject turns to things like “points of diversion.” But it’s not as complicated as it sounds. Try this hypothetical scenario. Colorado Springs buys 10,000 acre-feet of 1879 water now being diverted for farms at Rocky Ford. The Springs wants to change where the water is taken out of the river or “point of diversion” from Rocky Ford to the Otero Pump Station north of Buena Vista, but that change would diminish the flow through Buena Vista and Salida (presuming we didn’t have our new RICD). So why does the UAWCD, whose stated mission is to protect local water resources, want to make it easier for a distant city to divert water out of our county?

Well, that is a trifle more complicated.

Actually the UAWCD serves many counties. And it also has an obligation to develop water for future usage.

And make no mistake; having an RICD may change many things. For instance, the right may mean there will be a little less water available for upstream development (but so would any new water development). And it could also change the value of some water rights by limiting where water can be diverted. But technical and financial consequences may not be the biggest ramification of having an RICD.

[Bev Scanga campaign sign]

In other words, the RICD is designed to protect water flow in the river. But it also alters the law to provide protection for hitherto unrecognized water users, and that may spawn some philosophical and social repercussions, which could change things for water users — and the UAWCD. Though I’ve long figured that the recreation industry had to be acknowledged by our water laws eventually, it’s a bit like women’s suffrage; you can’t be sure how the new players will fit in. They’re virtually certain, though, to harbor some novel ideas about how the UAWCD, a tax-supported agency, should serve users.

THE UAWCD OPERATES in two forms. One is the District that collected about $189,000 in property taxes in 2005 from people in Chaffee, Custer, and western Fremont counties, and spent almost $250,000 — for a $60,000 deficit.

The other incarnation of the UAWCD is its “Water Activity Enterprise” which traffics in augmentation permits. If you already know what an augmentation permit is, you can skip a couple of paragraphs.

If you want to develop water in Colorado, you have to show that you will not interfere with holders of senior water rights. That holds for wells, too, because they’re hydrologically connected with surface flows. Therefore, if you drill a well in 2005 and pump the water up and consume dozens of acre-feet , you might be using water that rightfully belongs to somebody with, say, an 1882 water right.

But arranging for another source of domestic water could be difficult and expensive for those who live miles from the closest stream, ditch, or municipal water supplier. You can, however, buy water to put into the river to replace what you use with your well — and by doing that, you protect those senior water rights.

THAT’S AUGMENTATION. And in basins, such as ours, which are considered over-appropriated, augmentation is generally required for wells serving commercial and industrial operations, livestock production, irrigators, housing developments, and small acreages which require outside water.

Augmentation is not, however, required for every well. Exemptions are made for in-house use only wells, replacement wells, single domestic and livestock wells which serve tracts of land comprised of 35 or more acres, and wells serving small businesses.

Clearly, augmentation is not for everybody.

But it’s a business the UAWCD Water Activity Enterprise is in. The district acquires water rights and then sells augmentation permits, generally in units of 1/10 of an acre-foot per year.

Thus people drill wells, and build houses in areas without municipal water systems — that is, on rural acreages. And that makes the UAWCD financially reliant upon housing developments outside city limits — and also inextricably linked to planning, development, and real estate sales.

Thus in many ways the conflict over obtaining a RICD was less a tussle between the UAWCD and commissioners over jurisdictional power than a contest between tourism and real-estate development.

To some extent, the two industries feed off each other. In general, the more attractive an area is for tourists, the more attractive it is to second-home buyers, and vice-versa. So they’re not necessarily in conflict. Nor, for that matter, are conservancy districts and RICDs necessarily in opposition, since the Upper Gunnison River Water Conservancy District took the lead in getting a guaranteed flow for the water park just west of Gunnison.

So why has there been so much conflict about keeping water in the river in Chaffee County?

For starters, there isn’t enough water to go around here. Our river, the Arkansas, is over-appropriated from its headwaters above Leadville to the Kansas line. Indeed, it is the most over-appropriated river in Colorado, according to Jeris Danielson, a former state water engineer, who spoke at the Western Water Workshop in July.

“Over-appropriated” means there are more legitimate demands on the river than it has the flow to deliver. Water use decisions can be made on many bases — economic, social, cultural, aesthetic, moral, historic, political, etc. — but they have to be made.

In Colorado, even though the water belongs to the public, the decisions usually are not made by the public. But every so often, we do get to vote on a water issue, as with Referendum A in 2003. And now voters can take a stand about water issues once again by casting their vote for the next Chaffee County commissioner.

Or perhaps it would be more appropriate to say that voters can make a stand about whether Chaffee County citizens will have any say about their water — because Beverly Scanga claims that the county government shouldn’t be meddling in water issues. She says “We already pay taxes to the Upper Arkansas Water Conservancy District to have them protect our water.”

And she also contends that the county’s legal expenses for an RICD filing was “for special interests only.”

THAT’S AN INTERESTING ACCUSATION. But it depends upon how you define “special interests.” If government entities should only invest in things that serve the entire population, then public funds probably shouldn’t go to playgrounds, golf courses, senior citizen centers, swimming pools, or even maternity wards or Alzheimer’s research. Presumably, however, public funding is appropriate when it serves a substantial portion of the citizenry.

But is water-related tourism in Chaffee County a big enough “interest” to qualify?

It would seem so. In 2005, there were 278,077 commercial raft passengers on the Arkansas River between Granite and Canon City, and the most popular segment was in Brown’s Canyon in Chaffee County with 110,110 passengers.

Local economic stats would indicate that about a third of those tourists stayed at least a night in Chaffee County. And the Salida Chamber of Commerce says you can figure that each of those tourists spent about $150 a day. So we’ve got a third of 278,077, which works out to 92,692, each spending $150 for a total of $13.9 million in 2005 from commercial raft passengers.

And anglers spend money here, too, because the Arkansas is one of the premier brown-trout fisheries in the United States. But how much?

I asked Greg Felt, who runs a fishing-guide service. “I can’t tell you that there were 10,000 fisherman-days, each one worth $250 to the local economy, or anything like that,” he said, “because nobody keeps those kind of records.” But fly-fishermen tend to be high-end tourists, he said, willing to spend money on motels and meals, and they don’t come just once a year. “We have many clients who come up at least once a month when it’s warm, and some that come once a week.”

Short-term boaters in the Salida and Buena Vista whitewater parks, and the people who hang around to watch them, also spend money. But just how much is guesswork.

In 2000, however, the city of Golden commissioned a study of its water park in Clear Creek, and it put the economic benefit at $1.4 to $2.0 million per year at a level of 13,000 annual user days. Say it’s only a fifth of that in Chaffee County, that’s still about $300,000 a year from just the whitewater parks.

[Tim Glenn campaign sign]

THE CHAFFEE COUNTY LODGING TAX indicates that $12 million was spent on motel rooms in 2005. And according to the surveys I could find, lodging represents about 25 to 35% of what people spend on vacation. So I’ll assume that total vacation spending in Chaffee County is at least $48 million a year.

Local business organizations estimate that about a third of our tourist dollars, or at least $16 million a year, come from tourists attracted by river recreation, including rafting, kayaking, fishing and riverside parks.

Because a lot of local vacationers either camp or stay with friends or relatives, and we’ve got countless day trippers up from Denver and the Springs who never stay in motels, I figure that the $48 million based upon lodging tax revenues is probably just a fraction of the real number of tourism dollars spent here. But I’ll go with it.

Then add the money spent by people who moved here because they are rafting, kayaking, or fishing enthusiasts (and who in turn buy homes, cars, and furniture here) and water-related recreation clearly contributes an Olympian sum to the local economy.

So if the Chaffee County Commissioners voted to spend $500,000 on legal proceedings to protect $16 million (or perhaps even two or three times that) in annual local income by getting an RICD, it doesn’t sound like money being “thrown away” to me. But Scanga contends it is.

Also, as she points out, an RICD doesn’t put more water in the river. Instead, it merely seeks to maintain the current flow in the river, but when it comes to flow, it doesn’t matter “that the county does not own any water.” What matters is establishing a water right.

THE BEST ANALOGY might be a water right for a hydro-electric plant. It’s a “non-consumptive right.” The owner just has the right to run it through the turbine (thus who actually has the right to consume that water later is irrelevant). The purpose of the right is to make sure that there’s an adequate water supply to run the turbine. And the RICD works the same way. The owner of the water right has the right to appropriate a certain volume of water through a given course at a given time.

And that’s why the county wanted an RICD. But was the county the appropriate entity to seek such a water right?

Since both Salida and Buena Vista were involved, having a municipality do it would have required two filings, which would have meant more legal expenses. Thus it seemed preferable that either the county or the UAWCD apply. But the UAWCD was opposed to the RICD.

In 2005, the UAWCD’s Water Activity Enterprise brought in $560,000, mostly from water sales and maintenance and storage fees, and spent $415,000. It’s profitable. But does the UAWCD serve the public? Or does it, too, serve a special interest?

Well, once again, that all depends on what you call a special interest. As Terry Scanga, manager of both the UAWCD and its Enterprise, put it in a recent request for more project water to the Southeastern Colorado Water Conservancy District, “The vast majority of the growth is happening in the rural areas,” so “lands are sub-divided for housing” and thus demands for augmentation of wells are increasing.

But couldn’t selling augmentation permits in order to enable rural residential development be classified as pandering to “special interests”?

Well, of course. But what can you say? Our government is charged with serving everyone, and surely that translates into serving special interests, too.

Beverly Scanga’s campaign, however, embraces far more problematical growth and development views.

Recently, a rancher near Poncha Springs expressed interest in arranging a conservation easement. Essentially, that means selling the development rights to a non-profit group and permanently keeping the land in agricultural production.

At a county commissioners’ meeting where the commissioners voted to support the conservation easement, Bev Scanga expressed concern that easements take away development rights of future family members or force ranch owners to remain in an unprofitable business.

That’s true. Conservation easements do deprive heirs of the right to develop the property. But so would selling the property outright, or subdividing and developing it in order to pay for a gracious retirement. Personally, I presume people are capable of making their own decisions regarding such matters — after all, there’s a willing seller and a willing buyer, and we live in a market economy.

BESIDES, I HAVE A LITTLE TROUBLE believing that the tens of thousands to hundreds and hundreds of thousands of dollars generally paid for development rights, plus the ag land, house, cattle, goods, and mementos don’t constitute an adequate inheritance.

But yes, conservation easements might compel future owners to remain in unprofitable businesses, just as Scanga asserts.

But conservation easements may also make it possible for people who love farming and ranching to acquire adequate acreage, which has been virtually impossible for most landless yeomen hereabouts before conservation easements, because unencumbered, developable land in Chaffee County is currently priced way beyond the means of working farmers and ranchers.

Currently, it’s far more profitable to divide land into five-acre ranchettes, or hundreds of 1/10th-acre subdivisions, than it is to work it.

In the long term, conservation easements probably can’t reverse that trend, but they may save a little ag land. And they’ll also save tax dollars.

It seems logical that if you take 500 acres, and divide it into five-acre lots and put a house on each, local tax revenues should increase, and they do. But the cost of government services goes up even more. If the cost went up by the same amount as the increased tax revenue, taxpayers would be none the worse off, at least financially. But according to every study I’ve read, the cost goes up by more than the increase in tax revenue.

Why? Here’s an explanation from a 2001 “Cost of Governmental Services” study conducted in Saguache County, based on 1999 figures.

If 1,000 acres of hay land with an assessed value of $60,000 in Saguache County will generate approximately $1,350 annually for the county in property taxes, that same 1,000 acres developed into 250 single-family homes will generate $21,450 in property taxes. That’s a $20,100 annual increase in county revenue, and yet it won’t cover expenses.

“This is because,” the report says, “as hay land, the 1,000 acres requires approximately $470 in services during the year — an $880 surplus for the county. However, with single-family homes the same land would require more than $24,660 in annual services — a $3,210 deficit for the county. In other words, converting the hay land to single-family residential development will require the county to choose between either increasing its tax rate to cover the additional $3,210 in expenditures or lowering the level of service it currently provides.”

THE SAGUACHE COUNTY study found that the county spent $1.17 on services for every tax dollar the county collected from residential property. For commercial, industrial, and extractive lands, it was 53 cents in services for each dollar, and for agricultural land, 33 cents.

So keeping land in agriculture and out of residential development saves tax money. And not just in Saguache County. In a 2000 study of Custer County, the government service costs for each dollar of tax revenue were $1.16 for residential, 71 cents for commercial-industrial, and 54 cents for agriculture. In a 1999 study of Grand County, the ratios were $1.21 for residential, 34 cents for commercial-industrial, and 33 cents for agriculture.

Conservation easements on agricultural land provide benefits that most of us like, starting with lower taxes, and continuing through open space, local agriculture, and keeping water in the county.

Beverly Scanga, however, doesn’t like them. She stands against “conservation easements,” “land planning,” and “rezoning.” She contends that the current commissioners are trying to “devalue” private property with zoning, but at the same time she complains that steeply escalating property values are driving out working families. She simultaneously contends that the current commissioners will deliver a “Boulder” plan which encourages rampant growth and soaring prices, but maintains that they are suppressing economic development. She champions private property rights, but lambastes those who sell their development rights.

In essence, Scanga blames our current commissioners for economic trends that have afflicted our entire nation, such as higher housing costs, lower wages, and fewer industrial opportunities.

AND SHE APPARENTLY BELIEVES that she can fix those things by safeguarding us from zoning and protecting our “private property rights,” thereby assuring that ranchers can make top dollar when they subdivide; developers will thrive; locals will have plenty of construction jobs; young families can buy modulars; and there will be endless acres of affordable trailers available for waiters and river guides — right alongside gated communities with golf courses and landing fields for the jet set.

Personally, I figure her ideas would usher in build-out and super-sprawl within the decade. But on the other hand, I’m not really expecting any county commissioners to resolve the economic plights that currently bedevil mountain resort communities.

On a bitter-cold night last December, I walked down to the Salida Senior Center to hear a presentation from Jim Westkott of the state demography office. He said that Chaffee County will continue to grow, and most of the growth will result from what he called “residential industries.”

Retiring baby-boomers will move here and build houses, or will build second homes here. These houses, in and of themselves, will be a major industry, but one that’s almost invisible, he said, because we don’t look at scattered homesites in the same way we’d look at a mine or foundry.

Yet each house not only creates employment in its construction (architects, general contractors, carpenters, masons, electricians, plumbers, etc.), but in its remodeling and maintenance over the years. There’s also an increase in retail and service workers, etc. Those people need to live somewhere, too, so more housing begets a need for more housing.

“Ultimately, the county must find a way to manage the growth of these residential industries,” he concluded, because “adding other industries in an effort to diversify will only compound problems of growth, e.g., affordable housing….”

Slowly and steadily, or rapidly and eagerly — depending upon whom we elect as county commissioner — we seem to be headed toward suburbanization, with all of its sprawl, traffic, and parking lots. And there may not be much that any board of county commissioners can do about this.

But the current board is trying to steer growth toward existing municipalities, which makes sense economically and environmentally. Services and utilities are cheaper to provide that way, and we don’t have as much driving and related problems if people live close to schools, stores, churches, etc.

I’m not going to argue that Tim Glenn and the other two commissioners have done everything right. One thing that comes to mind was the county’s $1,500 donation to KHEN, Salida’s community radio station. I like KHEN, but I don’t think it merits a tax subsidy any more than I do. Any board will make some mistakes, though.

The real issue in this particular election is not mistakes — or whether we will see continued growth and development. It is whether we should try to keep some water in the river and preserve a few oases between the settlements, or should encourage sprawling development in every direction. And on that basis, I like Tim Glenn’s views a lot more than I like Bev Scanga’s.