Referendum A is NOT a meaningful solution

By John Stencel

Rocky Mountain Farmers Union’s Water Task Force and Board of Directors recently decided to oppose Referendum A and took the unusual step of asking Gov. Bill Owens to call a special session of the Colorado Legislature to address the referendum’s shortcomings before presenting it to Colorado voters.

Proponents argue that the referendum will be a “win-win” solution for rural and urban areas of the state by funding small- to medium-size water projects that will provide water to both agricultural users and Front Range developers, while protecting Colorado’s open spaces.

Upon close examination of the initiative, we are convinced that Referendum A does not present a viable solution to Colorado’s water needs, and may even harm, rather than help, agricultural producers and rural communities throughout the state.

Here are some of the issues that Referendum A proponents tend to ignore: The stated purpose of Referendum A is to fund the development of small- to medium-size water projects, an action we fully support. Yet in our discussions with members of various water conservation districts, obtaining financing to build such projects isn’t the problem. Historically, proposed projects rarely make it to the construction phase because districts do not have the money to carry out feasibility studies in order to determine if the project will work. Feasibility studies can cost hundreds of thousands, even millions of dollars, and few water districts are eager to sink sorely needed funds into projects that may or may not work, depending on the outcome of expensive studies. The referendum needs to provide monies for feasibility studies as well. Instead, Referendum A bonds require a feasibility study as part of the application process.

Referendum A also requires that any water projects funded have a minimum cost of $5 million. Unfortunately, for many agricultural water users, this minimum cost is a prohibitive amount, and few farmers and ranchers would be able to fully pay back such projects. Yet many producers and water organizations need help financing projects that would make water delivery and use more efficient. Referendum A should include a provision that would assist projects costing less than $5 million that would truly benefit agricultural water users.

Referendum A further complicates matters by creating an unrealistic timeframe for the selection of projects. At least two recommended projects are required to come from different river basins and must have a start date of 2005. If voters pass the referendum, water conservation districts, municipalities, and even private entities will be invited to submit proposals to the Colorado Water Conservation Board (CWCB), who will then recommend projects to the Governor. Considering how time-consuming and expensive feasibility studies can be, the Farmers Union wonders how many small- and medium-sized projects are ready to be submitted to the CWCB by next year?

The Farmers Union is also concerned that draft versions of the Blue Book clearly state that entities seeking revenue bonds can use the money for building new storage, improving existing facilities, increasing water conservation, or acquiring water rights. Since private entities are invited to submit project proposals under this referendum, real estate developers will be able to use this public pot of money earmarked for water storage projects to acquire agricultural water rights for development purposes. Further, a project that simply proposes the acquisition of water rights wouldn’t need a complicated feasibility study, and would likely be ready for implementation by 2005. Thus, the effect of Referendum A may be tilted away from district storage basins and toward private real estate development.

The Farmers Union does not see this scenario as a “win-win” solution for agricultural water users in the state. Additionally, provisions allowing for mitigation to rural communities, who may suffer from environmental or economic hardship when water is shipped out of their water basins, were left out of the bill. If Referendum A is passed, there will be no mechanism by which affected communities can help insure that proposed water projects are truly “win-win.”

RMFU has asked the Governor to call a special session of the legislature to fix the serious flaws in the legislation and provide the integrity the initiative does not provide now. We believe that the referendum would be significantly improved if the following provisions were made: 1) basin of origin mitigation was included in the referendum, 2) the $5 million floor on projects was lowered or removed entirely, and that financial assistance be made available to those water projects costing less than $5 million that truly benefit agricultural water users, and 3) that the Colorado Water Conservation Board (CWCB) construction fund includes the financing of feasibility studies for small-scale projects. Failure to include these provisions in the referendum proves that it is not crafted to benefit agricultural water users or rural communities.

In light of the serious problems presented by Referendum A, Farmers Union encourages Colorado voters to oppose the referendum if the Governor does not call a special session to correct these grave inadequacies. Yes, we have suffered immensely due to the drought, but that does not mean that we have to settle for a so-called solution that may leave rural communities high and dry, and Colorado citizens holding a big fat bill.