Report of Interview on Privatization of Water
Note: information between <> was obtained through research of the privatization team and was
not mentioned during the discussion with Mr. Whitehead and Mr. Bradley.
On March 13, 2012 Trish Pegram, Ellen Park and Nadine Ancel met with Bruce Whitehead,
executive director of Southwestern Water Conservation District, and Gene Bradley, board
member of Animas La Plata Conservancy District, to discuss the topic of privatization of water.
Colorado Water Laws
Because of the unique situation regarding water in the West Mr. Whitehead began the
conversation with a history of water rules in Colorado. Some Colorado water laws date back to
before statehood when miners were concerned about other miners diverting their source of water,
and to the San Luis People’s Ditch, <developed in 1852 before Colorado was a territory and
which holds the first adjudicated water rights in Colorado>. Colorado’s Constitution, Article
XVI, Sections 5 & 6, declares that every natural stream not already appropriated is the property
of the people of Colorado. Further, domestic uses have priority over agricultural uses, which
have priority over manufacturing. Colorado is a “prior appropriation state,” meaning the first to
divert and put the water to a beneficial use has the senior property right to that water, i.e., “first
in time, first in right”.
Once a diversion and beneficial use of water has happened and a court decree has been obtained
describing those rights, these water rights are protected. The water on private property may or
may not belong to the owner but the land under it belongs to the property owner. Under Colorado
law, water use rights are private property rights and may be transferred to others. The purchaser
will receive only the rights which the seller has, in both quantity of water, time of use and form
of use, unless a Water Court changes the terms of the use. <The Colorado Water Courts were
established by the Water Right Determination and Administration Act of 1969, a state law which
created seven water divisions based upon the drainage patterns of Colorado's rivers. Water
judges are District Court judges appointed by the Colorado Supreme Court. The Water Courts
have exclusive subject-matter jurisdiction in the determination of water rights, the use and
administration of water, and all other water matters within the jurisdiction of the water
divisions.>
Ground Water
Underground water may be considered to be tributary to the surface water system. According to
Colorado law, every well that has been put into use since May 8, 1972 that diverts ground water
must have a well permit. To obtain a permit for a new well or an existing one that is
unregistered, you must file an application for approval of a permit with the State Engineer. < For
each permit application, the State Engineer’s office staff determines the amount of water
available at the location and determines if there is potential for injury to other existing water
rights following statutory guidelines before they will issue a well permit. Different permits are
available depending on the intended use for the water, including:
Page 1 of 4 • Household-use Only Well (exempt*): Issued for ordinary household use for a singlefamily dwelling and does not allow for outside or livestock watering.
• Replacement Well (exempt*): This permit is for the purpose of replacing or deepening
an existing well, which allows the uses for the original well to transfer to the new well.
• Domestic and Livestock Well (exempt*): For land tracts of more than 35 acres where
the well will be the only well on the tract or on land tracts less than 35 acres in locations
where the well use will have minimal impact on surface water rights. Depending on the
provisions of the permit, the well may be able to serve up to three single-family
dwellings, irrigate one acre or less of lawn and garden, and provide water for the permit
holder’s domestic animals and livestock.
• Unregistered Existing Well (exempt*): Available for a well put into use before May 8,
1972 that must be registered in order to sell the property or re-drill the well. The permit
will allow for the historic uses of the well provided that the uses are no greater than
those allowed for a domestic and livestock well permit.
• Non-exempt Well: In over-appropriated areas of the state, non-exempt wells must have
augmentation water available in order to prevent injury to senior water right holders.
This augmentation water must replace the amount of water consumed through nonexempt uses. The most common non-exempt wells are for irrigation, commercial,
municipal, and industrial purposes.
* An exempt well is exempt from water rights administration and doesn’t fall under
Colorado’s water-use priority system. This means that as long as you use the well for its
intended purpose, you don’t have to augment the water you use.>
Interstate Compacts
Since many downstream states were developing faster than others and, therefore, were feared to
be appropriating all the water from the Colorado River, all the states through which the Colorado
flowed jointly negotiated and signed a compact setting the quantity of water from the Colorado
River due to each state. This Colorado River Compact was signed in 1922, and, at the same
time, a compact was negotiated between CO and NM for the La Plata River requiring CO to
deliver to NM, at the state line, ½ of the water in the La Plata River at Hesperus. The proposed
Long Hollow Project on the Fort Lewis Mesa is intended to store water during winter and high
run-off seasons in order for Colorado to meet this obligation. By creating a reservoir, water can
be sent to New Mexico when the La Plata River is running low and unable to do so naturally.
All current water right owners will maintain their rights.
Conservation and Conservancy Districts
In 1941 the state of Colorado designated four conservation districts, one of which is the
Southwestern Water Conservation District, which consists of some or all of 9 counties. The other
3 districts are: Colorado River District, the Rio Grande District, and the Republican River
District. The Water Conservancy Act of 1937 authorized the formation of Water Conservancy
Districts, one example of which is the Animas-La Plata Water Conservancy District. These
Page 2 of 4 conservation and conservancy districts have taxing authority (subject to TABOR) and appointed
boards. The conservancy district board members are appointed by a water judge; and the
conservation district board members are appointed by the county commissioners.
Native American Treaties
Water rights were reserved to Native American tribes by the federal government under the
treaties establishing tribal reservations. These rights have been adjudicated as senior, dating to
the treaty establishing them. Water rights of the Ute Mountain Ute and Southern Ute tribes have
been settled under the Final Settlement Agreement of December 10, 1986, which has led to the
Animas/La Plata Project.
Private and Public Ownership of Water Treatment and Delivery
The provision and treatment of water in La Plata County is handled in various ways: publicly
owned and operated, privately owned and operated, and some private-public partnerships. Most
of the water for the City of Durango comes from water rights purchased on the Florida River,
water rights in the Animas River and rights to water in Lake Nighthorse, and is managed by the
City of Durango Public Works Division. The rights on the Florida were purchased from senior
owners, and were originally agriculture rights that the city had changed, by the Water Court, to
municipal use. There are several quasi-governmental water districts in our area, such as the
Purgatory Metro District, and the Durango West Metro District. Example of private water
companies are: Animas Water Company, which is located north of town, and the Edgemont
Water District. The public health department has oversight of water quality.
The Lake Durango Water Authority is an example of a private company, Lake Durango Water
Company, reverting to a quasi-government authority. The for-profit company was formed by the
developer, who owned private water rights to the Pine Ridge Ditch and sold water to the
residents of the area. Due to poor quantity and quality of water during the two dry years of
2002/3, resulting in a lack of water to the area residents, La Plata County mediated a resolution.
The result was that La Plata County and Durango West II formed a water authority, which
bought Lake Durango Water Company and its water rights for $2.5M, creating the Lake Durango
Water Authority. (Two government entities are needed to form a water authority. However,
they are not a taxing authority.) The purchase was financed by the users through the Colorado
Water Resources and. Power Development Authority. Lake Durango Water Authority is
considered a utility and is, therefore, subject to public utility rules of the CO Public Utility
Commission (PUC). This commisssion governs both private and public utilities including
several smaller private water utilities which provide water to subdivisions throughout the county,
such as Los Ranchitos, Forest Lakes and Edgemont. In a manner of speaking, public-private
partnerships are created. Common throughout the county are individual septic systems for the
management of sewage. Once permitted, individual wells on private property are not regulated,
which may contribute to health problems due to contaminated wells. Cisterns, where
homeowners buy their water from a private or public facility, are also found throughout the
county. However, if the water source is discontinued, for example, during a drought, the water
may be shut off.
Page 3 of 4 Corporations Buying Water and Water Rights
In the recently mentioned cases in the news of municipalities selling water to companies for
fracking purposes, it should be noted that the cities are not selling water rights, but rather selling
excess water to corporations for various uses in order to augment depleting government
resources. If the situation occurs where water is less abundant, the city may have to discontinue
the sale of water to these companies in order to insure that residents are receiving water.
Another recent case has to do with private companies buying up agricultural water rights,
ostensibly to protect the rights for agricultural uses. However, when water courts are asked to
judge on a change in water rights, to manufacturing, say, the important factor is the ”historical
consumptive use”, and these companies may in fact be engaging in a “buy it and dry it” strategy
so that the courts will find in their favor in the future. In other words, when a water court is asked
to change the use of a water right, they base the decision on the historical use. If there has been
no agricultural usage for many years, it is more likely that the judge will allow a change.
Summary
Throughout the county and the state there are a variety of public and private methods of
managing water and the Colorado Conservation Board is always looking at water demands of the
future and potential ways of managing them.
In general, private ownership of water by small companies seems to work better for small areas
and public ownership for larger ones.
The issue of the global problem of water ownership by large corporations is outside the scope of
this interview.
Nadine Ancel, Ellen Park, Trish Pegram, 3/20/12
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