By Alan Prendergast
By Michael Roberts
By Michael Roberts
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By Patricia Calhoun
By William Breathes
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By Melanie Asmar
The March 21 Loveland Reporter-Herald included an ad offering two shares for $20,000 apiece. "I don't think they ended up selling for that much," Werner says, "but it gives you an idea of what the frenzy has been like."
Werner is quick to point out that the Northern Colorado Water Conservancy District has nothing to do with the price of the shares. In Colorado, water is a property right that can be rented, leased, bought and sold, just like any other piece of property. The details of the sales are between the seller, the middlemen -- or water brokers-- and the buyer. The district's primary purpose is to operate and maintain the delivery system. And while the district will sometimes release more water to encourage cities to rent their excess to farmers, it otherwise has little to do with the water commodities market.
Still, Werner can speculate as to what's been driving the cost of water so high. Some people believe that deep-pocket speculators are gambling that the price of water will continue to go up. Others, including Werner, note that the high-priced water coincides with the advent of anti-growth measures, one of which will appear on the November ballot. All cities and towns in Colorado require developers to "bring water" to the table when applying for annexation. Some water-rich cities will accept "cash in lieu" of water, although the trend is toward insisting on actual water rights. The anti-growth push may actually be speeding up the process and inflating the price of water as developers rush to get their projects approved before voters can stop them.
CBT water isn't the only water that's escalated so wildly -- historic water rights on a river such as the St. Vrain can be equally valuable -- but it's the benchmark by which other water rights are measured. And CBT is particularly popular for two important reasons: It's easy to transfer the rights from one type of use to another, and they can be transferred anywhere within the district's boundaries.
Transferring historic water rights from one use to another, or from one place to another, usually requires going to a water court specifically set up to deal with water issues. And there's no guarantee that a judge will allow agricultural water to be sold for industrial uses, or that a farmer in one county can sell his water for use in another county. But CBT water transfers simply require filling out a form and paying a nominal fee. That's one reason the cost of CBT water has gone through the roof, says Werner, who heard of one developer who asked a water broker to find 500 shares of CBT water "and was going to pay whatever it took."
Such a buying frenzy has several impacts. Developers have claimed that the price of water in some areas adds as much as $15,000 to the price of a new home. Farmers are affected both positively and negatively. On the one hand, CBT water has been a great investment. About 43 percent of the original shareholders still hold on to shares bought at $1.50 each, Werner says; many of these people own hundreds of shares, which would make them instant millionaires if and when they decided to sell.
Some already have, including people who sold shares and then rent water back from cities to continue farming. "Of course, there's the danger that in a drought, they may not be able to rent that water," Werner notes. Or they may get caught by the escalating cost of the water.
As the cost of water goes up, the cost of land in farm country along the northern Front Range has jumped as well. Land with senior water rights, or that comes with shares of trans-mountain water, is worth even more -- often more than it's worth as farmland, which hurts young farmers trying to get started. Even those who already own their land but need to supplement their historic water rights with trans-mountain water find themselves competing with developers for every last drop.
These days it's popular to criticize dams and diversion projects, which in the past drowned entire towns, forests and ecosystems. But most of the current population along the eastern side of the Divide, including those who criticize water projects, couldn't live here without trans-mountain diversions. The environmentalist who works to protect the wetland and waterfowl habitat, the fisherman who argues for more water for trout -- neither would have anything to protect or argue over without the added water.
"Fifty years ago, if you had put a goose on the Fort Collins city logo, they would have laughed at you," Werner says. "There weren't any geese."
Jeff Rasmussen sits in the tiny kitchen of a small yellow farmhouse just off Highway 287, five miles south of Longmont, wondering where he's going to get enough water to finish his crops come late August. Without water, his yields will be halved, and another bad year -- following several previous years of lousy prices for his crops -- may "crush" his operation, he says.
After rising at 5 a.m., he'd gone out to irrigate his fields. Now he's taking a break from the midday heat. In the evening, he'll go back out with his farmhand and flood his fields again. In the hours in between, he'll fix broken equipment, or harvest, or plant, or do one of the innumerable other jobs a farmer must do on any given day. During the spring, summer and fall, Rasmussen will not finish his work until 10 p.m.