Potential Intergovernmental Agreement between the Town of Minturn, Eagle River Water & Sanitation District and Upper Eagle Regional Water Authority

Virtual Public Discussions January 19th, Jan 25th and Feb 2nd
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The Minturn Town Council will be holding public discussions outlining the concepts and options being proposed through a potential Intergovernmental Agreement (Agreement) between the Town of Minturn, Eagle River Water & Sanitation District, and the Upper Eagle Regional Water Authority.

The draft Agreement is expected to be publicly available on Tuesday, January 18th for review. A copy of the Agreement will be emailed out to the subscription notification list as an update to the Town Council packet, posted to the town web page and available in print at town hall.

The Agreement will be publicly discussed at the Minturn Town Council meeting on January 19th. The Council recognizes twenty-four hours is not enough time for public review prior to the Council considering a vote, therefore the meeting on the 19th will be for discussion purposes only. After the first discussion on the 19th, the public will have a week to review the Agreement materials and contact their Council representatives with questions and additional information prior to a first reading which will be held at a Special Council meeting scheduled for January 25th at 5:30 pm. Additional public discussion will take place during the Special meeting.

The Agreement will be reviewed as an Ordinance and will therefore have an additional discussion with a formal public hearing on February 2nd.

INTRODUCTION:

A proposed agreement between Minturn and the District & Authority would provide for Minturn to use significant valuable water rights, which would provide important water security to Minturn. Minturn will also receive a Recreational Covenant for Use of the Lake, when completed. In exchange, the District & authority would get the use of Minturn's Bolt's Lake Easement and the cooperation of the Town.  

If Minturn does not enter into this agreement, The District will, in all likelihood, obtain the easement by condemnation and Minturn would then be entitled to only the value of the easement as determined in Court.   Minturn is currently in the process of obtaining an appraisal of the value of its Bolt's Lake Easement, and that appraisal will be available before the proposed agreement goes before Council for final consideration.

Battle North (formerly Battle Mountain or Ginn) signed a contract last year to sell land for Bolts Lake reservoir to the District and Authority via the “Agreement Pertaining to Acquisition for Bolts Lake Reservoir Project.” This Agreement includes a one-year due diligence period prior to execution. The due diligence period will be complete as of February 9, 2022.

Long-time residents may recall the multiple agreements with Battle North’s predecessor, which voters approved in 2008 as part of the annexation procedures for the Battle North property to be incorporated into the Town of Minturn. Among other promises, the 2008 Agreements included Minturn acquiring an easement for the Bolts Lake area, and Battle North developing the reservoir for use by a future Battle North project and the Town of Minturn, primarily for augmentation purposes.

The Town has provided legal notice of its intention to sue Battle North for breach of the various agreements pertaining to the Battle North property and development approvals. Prior to filing the lawsuit, the Town and Battle North have agreed to mediation which will begin in March of 2022. The Town of Minturn, in all likelihood, does not have the ability to stop the sale of the Bolts Lake parcel because the District and Authority are prepared to file a condemnation act if necessary. The Town is still entitled to sue Battle North for damages. 

If Minturn’s easement is condemned, Minturn will receive the value of the easement as determined by the court. Minturn is in the process of obtaining an appraisal of the easement which should be received by early February.

ANALYSIS:

The District and Authority want to proceed with construction of Bolts Lake reservoir as quickly as possible, and to do so, have sought Minturn’s cooperation. To this end, the District and Authority are willing to commit, among other things, certain augmentation use rights to Minturn. Staff and Council have been involved in intense negotiations with the District and Authority to obtain the best agreement possible. In exchange for the easement, Minturn will obtain the following benefits.

If the public is not supportive of the proposed Agreement the deal does not have to be finalized. Click here for a list of frequently asked questions. 

BENEFITS:

  • The District and Authority are offering Minturn a permanent supply of augmentation water not offered to other entities outside of their service area.
  • Waiver of purchase price for 20-acre feet of permanent augmentation water (this is an $860,000 cash value).
    • The 20-acre feet is a perpetual augmentation supply as opposed to Minturn’s current 40-year contract with the Colorado River Water Conservation District.
    • The reduction in annual operation, maintenance, and repair costs between the District/Authority supply and Minturn’s current augmentation water contract over a 99-year time period equates to approximately $280,000.
  • Eagle River Surface diversion water right for 4.0 cfs – Case 21CW3030
    • With the approval of a Water Court Case 21CW3030 submitted by the District and Authority, Minturn will receive a surface diversion water right in the area of the confluence of Cross Creek and the Eagle River. This would allow Minturn to develop a fully redundant back up raw-water supply that could serve the entire Town and infill growth.  
    • With the approval of Water Court Case 21CW3030 submitted by the District and Authority, Minturn would receive a water right at Dowd Junction (well field or surface diversion to still be determined).
    • The District and Authority are paying for all fees associated with the Water Court application process (including attorney fees) at an estimated value of $100,000 to $250,000.
  • Option to Purchase Augmentation Water Supply55-acre feet will be held in reserve by the District and Authority for up to 30-years from the date of the IGA for Minturn’s right to purchase. The option to purchase will be phased as follows:
    • 30-acre feet will be made available when the District and Authorities decrees are entered by the Water Court.
    • 25-acre feet will be available once Bolts Reservoir is operational
    • This allows Minturn to reduce its current augmentation water contracts and direct the savings to other water system improvements.
  • Environmental Remediation of the Old Tailings Pile (part of the Eagle Mine Superfund Site)
    • The District and Authority have agreed to pay for the remediation of the Old Tailings Pile.
  • Recreational Use at Bolts Reservoir
    • The District and Authority would issue Minturn a recreational use covenant to allow public summer-time (approximately May – November) non-motorized use of the reservoir. This would include such activities as stand up paddleboarding, swimming, canoeing, and fishing.
  • Cooperation with the District & Authority
    • The IGA would provide for cooperation between the Town and the District and Authority on a number of topics including: administration of water rights on Cross Creek, environmental remediation in the Bolts Lake area, provision of water to Dowd Junction, and a commitment that the District and Authority will not claim that Minturn has abandoned any portion of its water rights.

WHAT MINTURN IS GIVING TO THE DISTRICT

  • The right to enforce Minturn’s Bolts Lake Easement
    • Minturn will still have the right to sue Battle Mountain in the 2008 Water Services Agreement
  • Minturn would commit to not develop its conditional water right as it pertains to Bolts Reservoir in a way that would interfere with the operation of Bolts Reservoir.
  • Release of the 2008 Water Service Agreement from the Bolts Lake Property
  • Minturn would cooperate with the District and Authority with respect to the construction of Bolts Reservoir.

TIMING

Minturn has until February 9, 2022 to either accept or reject the Agreement with the District and Authority. We anticipate Minturn will have the appraisal prior to any final decision being made by the Town Council.