San Juan, Colorado – In recent months, the financial burden of ongoing litigation has placed the San Juan Water Conservancy District (SJWCD) under fiscal pressure as they debate the potential sale of Running Iron Ranch. The property, co-owned with the Pagosa Area Water and Sanitation District (PAWSD), has become a contested asset as plans to construct a reservoir on the site clash with PAWSD’s intentions to sell.
The controversy began in the fall of 2024 when PAWSD initiated efforts to sell the ranch, a move opposed by SJWCD based on an agreement made in 2015 involving both districts and the Colorado Water Conservation Board. Subsequently, in December of the same year, PAWSD sued SJWCD to obtain a legal ruling in favor of their ability to sell the property regardless of SJWCD’s objections.
During a meeting held on January 20, the SJWCD board members disclosed that nearly half of their allocated Running Iron Ranch litigation budget of $10,000 had already been spent. By their next meeting on February 17, expenses had risen to $11,353, exceeding the year’s budget in just two months.
Joe Tedder, treasurer and board member, suggested that the litigation budget should be increased to $25,000. He mentioned possible strategies to cover the cost, including reducing other budget areas or increasing the overall budget, potentially pulling from district reserves.
Charles Riehm, another board member, advocated for boosting the overall budget to prevent sacrifices in other district programs until such measures become unavoidable. However, legal counsel Jeffrey Kane pointed out that increasing the overall budget would necessitate another budget hearing, which is not required if funds are reallocated from contingency reserves.
Candace Jones, the board president, proposed using the $10,000 set aside in the 2025 contingency fund to address the immediate legal expenses and prepare for a potential budget amendment, which would require a 30-day public notice.
Further concerns were voiced about the longevity of the lawsuit. Tedder warned that even the proposed $25,000 might not suffice if the legal battle drags on, remarking that his estimate was based on the assumption of a swift judicial decision.
Plans were made to review the budget again after receiving an engineering report on the reservoir from Yeh and Associates, which could provide clearer insights into the project’s feasibility and possibly influence the ongoing legal dispute.
Despite reluctance expressed by board member Bill Nobles, a vote was carried out, and it was unanimously decided to transfer $15,000 from the engineering and studies fund to the litigation fund to manage the immediate financial demands.
This situation not only highlights the challenges in managing public resources during legal disputes but also reflects the broader complexities of water management in regions facing developmental and environmental pressures.
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