Tri-districts pull out of Halligan project

By Cherry Sokoloski
North Forty News

The Halligan Reservoir enlargement project, designed as drought protection for Fort Collins and other northern Colorado water providers, will likely have to downsize to about half the original plan.

Halligan Reservoir sits on the North Fork of the Cache la Poudre River.

In late July, three water districts exited the project, citing high costs and the sluggish economy. With the current recession, communities served by the districts have seen slower growth and lower revenues, making water projects both less urgent and less affordable.

Withdrawal of the districts leaves just two participants in the project, Fort Collins and North Poudre Irrigation Co. However, discussion is continuing with the districts, and Fort Collins water officials hope they will reconsider.

The Fort Collins-Loveland, North Weld County and East Larimer County (ELCO) water districts--often called the tri-districts--sent separate but similar letters to Fort Collins. They noted the high cost of the project, lack of progress and what the districts see as opposition among city council members.

"We're concerned that the city council can at any time drop out of the project," said Mike DiTullio, general manager of the Fort Collins-Loveland Water District. "We're really at their mercy."

DiTullio said his district "strongly believes that water resources in northern Colorado need to be used by all entities." Fort Collins' anti-growth approach, he stated, affects the districts that are serving higher-growth areas.

Mike Scheid, general manager of ELCO, said the decision by his water district was mostly financial. "It was getting too expensive in today's economy, when we're not seeing the revenue," he said. "If demand doesn't occur, the need for storage is pushed further out into the future."

Alan Overton, engineer for North Weld County Water District, said his district's decision was based both on the budget, which "looks different" from a few years ago, and the timeline of the project. Progress has been much slower than projected, he noted.

Price tag dilemma

With fewer participants, the project will cost more money for those remaining. Permitting costs, which include preparation of a draft environmental impact statement, are about the same regardless of the number of participants. Construction costs, according to Fort Collins water resources manager Dennis Bode, would be higher per acre-foot with a smaller project.

Fort Collins is currently evaluating its options. Bode said plans will need to be firmed up within a few months so the U.S. Army Corps can finish the draft EIS, slated to be done early in 2011.

"We'll have to sit down with the Corps and propose a new plan," Bode said.

The most likely option will be to build a smaller reservoir. The original plan was for a 40,000-acre-foot project. Fort Collins' share is 11,000 to 12,000 acre-feet, while NPIC wants an additional 5,000 acre-feet. Since the reservoir currently has a capacity of 6,500 acre-feet, that could put the reservoir size at about 23,000 acre-feet.

However, with higher costs per acre-foot, budgets could force the reservoir size even smaller. Bode noted that sizing of the reservoir is complicated.

"If we have to reduce the size of the reservoir to fit the budget, it could be too small for the city's need for drought protection," he said.

NPIC owned Halligan Reservoir until 2003, when it was sold to Fort Collins. NPIC manager Steve Smith said his board has committed to staying in the project through the permitting stage. At that point, the board will look at the cost and decide whether to continue.

The five original participants have spent more than $5 million on the Halligan project. Of that amount, $2.3 million has been paid to NPIC as installment payments for the reservoir purchase.

In their letters to Fort Collins, all three districts referred to an agreed-upon threshold of $4 million, after which they could opt out of the project.

The tri-districts are now looking at other alternatives to satisfy their domestic water needs. DiTullio said his district is still involved in the Northern Integrated Supply Project (Glade Reservoir). The district is also continuing to buy Colorado-Big Thompson water and may use more gravel pits for storage.

ELCO has not determined yet how to fill the water supply void. According to Scheid, the district is considering smaller projects on an as-needed basis, such as more gravel pit storage and enlargement of existing reservoirs on the plains.

North Weld engineer Alan Overton said his district would look at other water supply options as demand occurs