The Crestone Eagle, October 2003:

Referendum A tops off-year election – Millions for unspecified water projects raises lots of questions

by David Nicholas

The Question as it reads in Senate Bill 236:

“Shall the state of Colorado debt be increased $2 billion, with a repayment cost of $4 billion, maximum total state cost, by an amendment to the Colorado Revised Statutes providing for drought relief by the financing of improvements to water infrastructure in Colorado, and, in connection therewith, authorizing the Colorado Water Conservation Board to issue Revenue bonds for the construction of private or public water infrastructure projects costing $5 million or more that have been approved by the governor; authorizing the water conservation board to recommend projects, including at least two projects from different river basins with a start date of 2005, and requiring the governor to approve at least one such project; setting aside $100 million of bond proceeds to finance projects, or portions of projects, that augment or improve existing facilities or conserve existing water supplies without creating new storage facilities; exempting the bond proceeds, the proceeds of sales by the board of water, power, or other assets from facilities financed by the bonds, and any earnings from all such proceeds, from the revenue and spending limits imposed by article x, section 20 of the state Constitution and article 77 of title 24, Colorado revised statutes; and requiring the general assembly and executive branch agencies to adopt by July 1, 2004, any necessary statutes and rules, respectively, to ensure the marketability of the bonds authorized by this measure?”

The wailing and gnashing of teeth
Usually, an off-year election is regarded as a boring consequence of the democratic process. But this year, the state legislature, after a session which has spent most of its time on water matters, has come up with a question which we might well want to have a say on in November. Referendum A comes about as a result of last year’s drought, which made most of us in the state nervous, and authorities in Front Range communities hyper.

Referendum A wants electors, to approve a $2 billion bond authority, for unspecified water projects which must be identified and be recommended with a start date of 2005. These projects will be identified by either the Colorado Water Conservation Board (CWCB) or the Governor. Further, each river basin, such as the San Luis Valley, may submit a minimum of two water projects for consideration.

Essentially, Referendum A bypasses the state legislature and places a huge bunch of money at the discretion of a state entity with close ties to the Governor. On the face of it, it does not appear earth-shattering, except that the money is the equivalent of about 15% of the entire state budget, or its equivalent of the 2003 budget request for the state Department of Human Services.

Referendum A appears as a result of Senate Bill 236, which had the most unspectacular passages through both the House and the Senate in the state legislature, and which has been signed by Governor Bill Owens. Normally, it would become law with the governor’s signature, but Referendum A was written into the bill, and under the provisions it must be voted on by the electorate before it goes into the statute books.

In short, SB-236 was loathed and hated by representatives of agricultural communities, so much so that when it reached the Agriculture (Ag) Committee stage in both the Senate and the House, it languished for months without sufficient votes to pass it.

However, proponents, supported in the main by the politicians and bureaucracies of Front Range communities, withdrew it from the Ag Committee and pushed it through the powerful State Affairs Committee in the Senate and the Finance Committee in the House. After that, the bill sat all through the session without getting a second and third reading on the floor required to put the Bill up for a vote, up until the very last days of the session. Then it was rushed through. The swing vote in the senate was Senator Lew Entz (R-Hooper) who had his reasons, which will be explained later.

Proponents, including Governor Bill Owens, speak of it as a water authority, which should benefit the farm-rural sector. The Governor encourages us to think not about the huge trans-mountain projects that cities are already able to finance, but about smaller, folksy projects like “a ditch company joining with a feedlot and maybe a town or irrigation district who can band together and get bonding for a project that’s $6 million or $8 million.”

Not surprisingly, support for the question comes from the Front Range communities who, during the drought last year, were faced with dwindling water supplies in reservoirs and heavy water restrictions for what water was available. During that time Governor Owens was unable to do anything to resolve the situation at short notice, and no governor worth his or her salt likes being unable to do anything about nature.

What makes the farm-rural sector skittish is that it gives the Colorado Water Conservation Board (CWCB) and the Governor the financial clout to create water projects at will without legislative oversight. Essentially if there is popular pressure by the people of Colorado to ease water shortages in the short term, they can and will. When we talk about the people of Colorado, we are talking about folks 70% of whom live on the Front Range.

The place, the Governor and the CWCB will be looking to initiate new water projects will be those areas where the water is and the population is sparse, specifically the western slope, the San Luis Valley and the Arkansas River basin. Representatives in these areas are adamantly opposed to such projects.

Referendum A, if passed, provides for water projects to be initiated, which can move water from one river basin to another without the legislature’s oversight. In addition, rural legislators will have little, if any, influence on the outcome.

State representative John Salazar (D-Alamosa), who chairs the Vote No on A Committee, says that it far too broad. While Salazar goes to great lengths to emphasize that he is not opposed to water projects, he opposes Referendum A. Salazar maintains that through the various state agencies, such as the Colorado Water Resources and Power Development Authority (CWRPDA), there is already enough bonding authority, so why the need for more?

The Referendum, says Salazar, gives the Colorado Water Conservation Board competing authority with the CWRPDA. Water projects initiated by the Colorado Water Resources and Power Development Authority have Legislative oversight and usually take several years to approve.

Also, says Salazar, “This means the CWCB will have to start something new which they have not been involved with in the past.” It means extra staff and learning on the run.

Next, Salazar says, the 2005 deadline to identify projects is not enough time for real water projects to be assessed and the relevant studies, such as environmental impact statements, to be carried out. So the only projects which have a budget of up to $5million have to be, mainly, the procurement of private water rights and/or short term borrowing to local water entities for a period of three to seven tears, such as water conservancy districts and rural water and sanitation districts.

Salazar then points out that it is a bond issue, which means the money needs to be paid back to the state. He says that even with a $5 million water project, as the governor mentions above, the revenue stream could not be guaranteed to pay it back and would most likely provide hardship to agricultural communities. In the electors “blue book” version, circulated to voters soon, it says that in the event that an entity is unable to pay back or defaults on the bond, the state would pick up the tab. With the state currently in deficit spending; critics say that is not a whole lot of consolation.

What is the Colorado Water Conservation Board?
The CWCB was created in 1937 for the purpose of aiding in the protection and development of the waters of the state. The Mission Statement of the CWCB is: Conserve, Develop, Protect and Manage Colorado’s Water for Present and Future Generations. With 36.5 full time employees, it has a budget of $3.3 million. The governor appoints the 8 voting members of the board, one from each of the state water basins. Ray Wright, President of the Rio Grande Water Conservation District is our representative on the Board. Other non-voting members include the State Water Engineer and the Attorney General, the Director of the Division of Wildlife, the Commissioner for the Department of Agriculture, and the Director CWCB. In terms of water and temporal power in the state, it is the right hand of God.

What is Lew Entz doing sitting on the fence?
Our state Senator Lew Entz, R-Hopper, has declared himself neutral on Referendum A. First, his name appears as one of the sponsors of SB-236—Ref A is its creature. The reason has to do with political wheeling and dealing over the various water bills which surfaced during the legislative session.

Entz, who had to resign from the CWCB when he was nominated for state senator in 2001, had been looking at the Colorado River Basin, earlier in the session, and had a bill, SB-126, to consider some specific water projects around the state. Under the Federal Compact, which governs the waters of the Colorado, the state does not use its full allocation by one million acre-feet (326,000 = 1 acre ft) per year. Currently, that one million acre-feet of water goes to Las Vegas and California. Entz, in supporting SB-236, has in it provision to do feasibility studies.

Although no longer specifically mentioned in the bill, Entz wants a study on the Colorado, exploring the feasibility of placing a dam at the state line to keep that one million acre feet a year from going any further and piping it back into the state, presumably back to the front range. The idea surfaced in his Senate Bill-126, which died due to lack of support, but the deal he struck had a good chunk of SB-126 tacked on to SB-236, thus securing his vote and allowing the latter bill to pass in the state Senate.

Most rural republicans, especially Entz’ friends and neighbors in the San Luis Valley, are opposed to Referendum A, and he has had to explain his neutrality, which he did at the San Luis Valley Land Use Conference earlier in September.

Referendum A is controversial, and rural counties are voting no, because it gives power and money to the Governor and a state agency which does not have to be specifically accountable to us on this issue. In the Valley, the Rio Grande Water Conservation District and the San Luis Valley Board of County Commissioners Association have come out opposing it. Ref A is a reasonable proposal, without a doubt, but how good it is and who benefits depends on where you are sitting. And where we sit should give us pause for thought. Lots of pause.