Water Adequacy Determination

New policy needs more analysis

Due to increased demand from a growing population and heightened uncertainty of consistent water supply, evaluating whether our current standards and assumptions remain relevant is not only a wise policy, but Colorado state statute also now requires such analysis. As dictated under statute (C.R.S. Section 29-20-301), the City of Fort Collins is currently developing amendments to our land use code that will define the adequacy of water supply for all future development. A first reading of the Water Adequacy Determination Code Update (the “Code”) will be presented to Council on Tuesday, May 16.

Under the proposed Code, “adequate” means a water supply that will be sufficient for build-out of a proposed development in terms of quality, quantity, dependability, and availability. As new developments outside the municipal service territory are proposed, the City has relied upon what is known as a ‘will serve’ letter issued by the water district serving the subject property. This letter states the water provider has the infrastructure and capacity to serve the development according to their own standards, which is both common and acceptable under state statute.

However, within the draft language presented to the Planning & Zoning Commission at its April 26 meeting, an assessment of adequate water supply is not merely limited to the municipal water utility. Rather, City staff and Council would effectively assume oversight of the four quasi-governmental water districts. While claiming that isn’t the intent, language matters. It is not beyond the realm of possibility for future staff or councils to take full measure of favorable language.

Among several issues, the P&Z Commission voted unanimously to pause consideration of the draft Code to allow more time for stakeholder engagement and to develop a better understanding of technical aspects of the issue. Your Chamber is fully supportive of this recommendation.

A quick history lesson may be helpful. Beginning in the late 1950s, City leaders decided against extending the service area of the municipal water utility as an attempt to control growth. People continued to move here anyway, giving rise to the formation of self-governing water and sanitation utility districts. The resulting four districts (Fort Collins-Loveland, East Larimer County, West Fort Collins, and Sunset) collectively serve over 20% of city residents and businesses, extending to surrounding communities and unincorporated areas of Larimer County. (see map)

Further energizing the effort is a pending hearing before the Colorado Water Court, where developers behind the 865-acre Montava mixed-use neighborhood are attempting to create a new water utility district. This step is necessitated by the proposed use of groundwater to serve the development incrementally, as opposed to the cost-prohibitive nature of purchasing surface rights up front for the entire development that would otherwise be required by an existing utility. In the absence of adopted code, the water court would be the sole authority in determining the adequacy of the water plan serving the Montava development. The proposal is further hastened by staff intent to have a decision rendered by the current Council.

Rather than limit the Adequacy Determination Code to assessing new water providers only, the draft language would allow the City to extend approval authority for all domestic and non-potable water providers operating within the community. To date, the City Attorney has not provided a legal opinion to buttress a claim of extra-jurisdictional authority over independent water utility districts and, by extension, water users across the region.

In reviewing the policy presented to the Planning & Zoning Commission, several concerns have been identified.

Established water providers will be required to submit engineer reports that detail their water supply and how their water supply system functions, allowing the City to assert its own judgment upon separate governmental entities that have each served the community for decades.
Each water district would need to secure approval of its standards, systems, and assessments from the Director of Community Development & Neighborhood Services, the determination of which could not be appealed to City Council, but rather through the court system.
In assigning its authority to a member of staff, Council is effectively extending sole jurisdictional authority of the City well beyond its statutory boundary to an unelected member of staff that does not necessarily possess the technical expertise to render such judgement. Meeting materials suggest an outside consultant would be engaged to inform the determination.
What are the financial and economic impacts to an existing water utility when a new utility is created within its service territory? How are they to be made whole for infrastructure investments and loss of a customer base upon which their business models depend?
Applications for water adequacy determinations for non-potable systems must be submitted concurrent with the construction permit application. Adequacy of water delivery for a proposed development must be established well before initiating the construction phase.
The Code would allow staff to issue a Water Adequacy Determination, conditioned upon the developer’s ability to secure a water rights decree, which is the reverse order of standard practice.

Stay tuned for updates.

Source: Fort Collins Chamber of Commerce
May 2023