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Colorado's public lands are faced with new challenges but water and land management depend on working together. Read about the relationship between water and land in Colorado and how Coloradans are converging to restore Colorado's public lands in the Spring 2018 issue of Headwaters magazine.

Browse articles and find a flipbook of the magazine here.

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Water Education Colorado

Leases Help Farms and Suburbs Weather Drought

By Dan MacArthur

The largest temporary water lease in Colorado history promises to benefit both rural and urban interests. As part of this innovative agreement, the City of Aurora will lease enough water to weather the drought. In the Lower Arkansas River Valley, lease revenues will help farmers survive lean times while retaining ownership of their water, as well as the option to keep some land in production.

As part of a $5.5 million, three-year deal inked in March of 2004, Aurora can lease up to 12,600 acre-feet annually—close to four billion gallons—of High Line Canal Company water. Paralleling the Arkansas River for 87 miles through Otero County, the High Line is the second longest canal in the state. With water rights dating back to 1861, the canal also holds the third and fourth most senior rights on the river.

High Line superintendent Dan Henrichs says the three-year lease will potentially dry-up about 36 percent of the 22,500 acres irrigated by the canal.

The rest will remain in full or partial production. In addition, farmers have the option of leasing all or part of their canal shares.

‘It's one of those things where the sun and moon and the stars lined up and everybody came away from the table with what they needed,’ says Aurora Director of Utilities, Peter Binney.

Aurora Mayor Paul Tauer also praised the agreement that he says demonstrates how cities and agriculture can work together. ‘We all win—farmers, small communities in the Arkansas Valley and Aurora residents,’ says Tauer.

High Line Canal President Stan Fedde expressed similar but more cautious optimism. ‘It will keep the water rights in the valley and some of the young guys on the land, which we need,’ he says. ‘At least it keeps the wolves away…We're getting a lot of pressure to sell and I'm against that,’ adds Fedde, whose family has farmed near Fowler for more than a century. ‘I don't want to lease either, but it's a lot better than selling.’

Bringing together the details of the lease arrangement took more than two years. It required convincing state lawmakers in 2003 to approve legislation allowing cities to negotiate short-term leases of water, rather than outright purchases. This was the first time the state had ever passed any water-lease legislation of this kind according to Binney.

To make sure that other organizations involved in regional water management would not oppose the deal, in the fall of 2003 the interested parties sat down with the Southeastern Colorado Water Conservancy District to come to an agreement on the larger implications of the transfer.

The resulting agreement with Southeastern prohibited Aurora from purchasing or permanently transferring additional water out of the Arkansas Valley for 40 years. At the same time, it acknowledged Aurora's right to lease a total of up to 145,200 acre-feet during that period. According to Binney, ‘What it did was put to rest 20 years of water wars. It was a very constructive agreement for all of us.’ It also paved the way for the finalization of the High Line lease.

Leased water will be delivered through exchange agreements with the Bureau of Reclamation and the city of Pueblo. It is held in Twin Lakes Reservoir, discharged to the Otero Pump Station, and then directed to the Spinney Mountain Reservoir.

Aurora leased water from 152 High Line shareholders, effectively taking some 8,200 acres out of production. Binney notes that double that number wanted to participate, but could not due to limits on how much water can be moved.

‘These new guys (farmers) are really struggling,’ canal company president Fedde concedes. While 87 percent of the shareholders voted for the bylaw changes necessary to permit the leases, he doubts interest would have been so great if crop prices were better. He believes that uncertainty combined with depressed crop prices made the lease attractive to farmers this year.

The city paid $5,280 a share, with individual payments ranging from $2,000 to $209,000. According to canal superintendent Henrichs, that is about triple the amount most farmers could have expected to net per acre in a good year.

And it's also a fair deal for Aurora, according to Binney. Desperate to fill its reservoirs depleted by on-going drought, the city plans to finance the lease with a surcharge of 68 cents per 1,000 gallons of water used. Doug Kemper, Aurora's manager of water resources, says they hope to negotiate additional leases with the High Line in the future as well.

Yet even with this new temporary addition to Aurora's water portfolio, Binney is convinced that the drought outlook remains grim. With the High Line water increasing Aurora's reservoir storage by perhaps 5 to 6 percent, Binney still estimates that this year reservoirs will fill to no more than 60 percent—the level above which mandatory watering restrictions could be lifted.

Beyond all the contracts and agreements that bind and protect them, both camps concur that the temporary agreement also requires a leap of good faith somewhat akin to leasing a new car. They can kick the tires, but confidence will come only after seeing how it runs. But for now they're content to at least be traveling together in a promising new direction.

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