DURANGO With the Animas-La Plata Project nearing completion, Jack Rogers, the citys public works director, told Durango city councilors its decision time to figure out how to pay for the citys share of water.
Also attending Tuesdays City Council study session were members of the Durango Water Commission. While no vote was taken on financing the water purchase, by consensus, participants told Rogers to ask the Colorado Water Resources and Power Development Authority for a loan.
Rogers said the $3 million, 20-year loan the city needs would have an interest rate of about 2.5 percent. It beats the rate the city would get anywhere else, Rogers said.
On the recommendation of a consultant, the city of Durango in 2005 asked the Colorado Water Resources and Power Development Authority to reserve a portion of A-LP water in its name.
The city has put down $1 million as earnest money. The deposit leaves the city with a bill of $5 million to $5.5 million. A healthy water fund reserve makes it necessary to borrow only $3 million, leaving money for other water projects, participants said.
Because the city has only a weeks reserve of water, 1,900 acre-feet of consumable water from the A-LP would be a comfortable backup for emergencies.
A-LP partners can consume only half the water they own. The remainder must stay in Lake Nighthorse.
A water-rate increase for city residents will be necessary but not immediately because of money in reserve.
A strong, straightforward public-education campaign will be required to sell water users on the need to buy A-LP water, the participants agreed.
They told Rogers to instruct the citys bond counsel to prepare language for a November ballot item that would allow the city to borrow money from the state agency.