Closed session meetings in Minturn now include discussions over two different development lawsuits

On Wednesday, the Minturn Town Council will meet behind closed doors to receive legal advice.

It’s a common practice for town council members in Colorado, who are allowed to deliberate in executive session if they’re conferring with attorneys and working on negotiation strategies in legal matters.

What’s not as common is the participation of a less than 1,200-person town, which has an annual general fund budget of $1.6 million, in two separate development lawsuits at the same time.

In Minturn, however, when you consider that both cases involve the West’s most precious resource, the origins of the town’s predicament become more obvious.

Both issues surround residential development and water, things which all involved want to see more of in the future. The expansion and filling of a dry area known as Bolts Lake, which was created through the construction of a ditch and dam in the 1890s, could make those wishes come true some day.

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Tale of tailings

Early Eagle County settler Ben Bolt created his lake as a recreational boating and fishing area, but areas surrounding the lake were later used as repositories for mine tailings in the now-notorious Eagle Mine operation.

When the nearby Holy Cross Wilderness Area was designated by Congress in 1980, Bolts Ditch — which was used to fill Bolts Lake — was left off of the list of existing water facilities within the wilderness area, restricting Bolts Lake from being refilled following the breaching of the dam.

The Eagle Mine operation was identified as toxic in 1984 and the nearby town of Gilman was ordered to be abandoned by the Environmental Protection Agency. The mine became an EPA superfund site in 1986, but there’s no evidence that mine tailings were ever deposited in Bolts Lake.

Nevertheless, the state deemed the site unsafe in the 1990s and Bolts dam was breached. The lake property remains dry to this day.

Minturn currently provides water for residents using Cross Creek, which can serve about 1,600 people in dry years, according to the town’s consultants. The town now has an estimated population of 1,169 and says it is limited in its ability to provide water service.

The shortage in water supply prompted the town council, in May of 2020, to pass a moratorium on the allocation of water taps for new-build construction projects requiring more than three single-family equivalents.

One answer to the stalling of development in Minturn could be found in the creation of new water storage at Bolts Lake. The new owners of Bolts Lake, local water districts Upper Eagle Regional Water Authority and Eagle River Water and Sanitation District, have purchased the property with the intent to develop it as a 1,200 acre-foot water storage location, saying it could secure service for customers of the district and authority for decades to come, as well as potential future development in Minturn.

Getting there will require federal, state, and local permitting, as well as deep excavation within the former lake footprint to roughly triple the volume of the original reservoir capacity, with the removed material being used to cap the surrounding property that still requires remediation from mine tailings.

It’s a long process which could take up to 10 years to complete, the district said of the plan. And the long process of getting to the plan has led to frustrations from the town of Minturn, which can be seen in recent court action against the Battle entities.

On Wednesday, in addition to a general discussion labeled “Battle Mountain litigation,” one of the items on the town’s closed-session agenda is listed as “Settlement of opposition in the Town’s pending Bolts Lake conditional storage right case.”

If the town requires any official council action related to the discussion, those decisions must be made in public.

Ides of March

Minturn’s official court action against the Battle entities began in March when the town filed a complaint in Eagle County District Court alleging that a group of five limited-liability corporations known as the Battle entities had defaulted on numerous obligations to the town, including water rights in Bolts Lake.

The Battle entities have long sought to develop hundreds of homes near Bolts Lake in a plan which included annexation of the developer’s land into the town. The 2008 annexation agreement between the town and the developer stated that the developer must rehabilitate the Bolts Lake dam and make the water stored in Bolts Lake available for use in Minturn’s water system.

The project dates back to a different era of development in the Eagle River Valley, however, prior to the 2008 recession. The recession prompted developer Bobby Ginn to abandon the development plans, and the project was transferred to the Battle entities. One of the LLCs in the Battle entities, known as Battle North, now owns roughly 600 acres of the annexed land, which stretches from Maloit Park to Gilman and, until recently, included Bolts Lake.

In the fall of 2021 Battle North stepped up its cleanup efforts of the property. In September the Gilman area cleanup was declared complete by the EPA, and in December the EPA said the Trestle area of the Eagle Mine Superfund site, where mining activities contributed to contamination of surface soils, had been sufficiently remediated by the landowner, as well.

The EPA in December also approved a conceptual work plan for a mine tailings pile near Bolts Lake; the plan describes the remediation work to be completed by Battle North on the tailings pile if and when a new reservoir is constructed north of the pile at Bolts Lake.

Due drink

The 2008 annexation agreement between the town and the developer states that the developer must rehabilitate the Bolts Lake dam to provide a minimum storage capacity of 320 acre feet while installing the infrastructure and facilities necessary to make the water stored in Bolts Lake available for use in Minturn’s water system.

In 2012, however, after it had become apparent that the developer’s plans were not happening, the town and the Battle entities reached an agreement regarding escrows and funding which said the parties shall negotiate in good faith to amend the existing annexation agreement.

“The Battle Entities have been negotiating in good faith with town staff and the ‘Battle Committee’ members to amend the existing Annexation Agreement for more than five years,” the Battle entities’ attorneys stated in an August 31, 2021 letter to the town.

That letter also points to a 2016 memorandum of understanding agreed to by the town which contemplated amending the annexation agreement and implementing a new plan for Bolts Lake.

In the years that followed the memorandum, “the Battle Entities continued in good faith to negotiate with Town staff regarding implementation of the Bolts Lake Concept,” the Battle entities said.

In 2019, the Battle entities proposed a plan to the town which would have allowed the Eagle River Water and Sanitation District to build the Bolts Lake reservoir, but the town rejected the idea, with residents saying they weren’t comfortable turning over control of the water to the district. The annexation, which began in 2008, also become final in 2019.

In August of 2021, Minturn issued a notice of default to the Battle entities, saying an easement providing for Bolts Lake water storage needs to be provided to the town. The town also said it had been made aware of the effort underway to sell Bolts Lake to the water districts.

Conveying the easement to the town for the water storage, as per the longest standing contract for the reservoir, is inconsistent with selling the land, Town Attorney Mike Sawyer said.

In February, the Eagle River Water and Sanitation District and the Upper Eagle Regional Water Authority closed on the deal to purchase Bolts Lake from Battle North, and the town of Minturn approved an intergovernmental agreement with the district and authority “securing augmentation rights for Minturn in exchange for a simplified future reservoir permitting process and other considerations,” according to the district.

Minturn, in its March complaint against the Battle entities, said the fact that the town has been waiting for years for the Battle entities to construct the water improvements and deliver the water as required by the annexation agreement has contributed to the damages the town is owed.

A representative of the Battle entities, in denying the allegations made in the complaint, said the company will respond to the lawsuit in detail when it feels it is appropriate to do so.

“Because the Battle Entities have not designed, engineered, and constructed the water facilities and therefore failed to deliver the water, Minturn has been required to do so,” the complaint reads. “This extensive delay has made it more difficult and expensive for Minturn to supply water to its residents than it would have been absent the Battle Entities’ breaches.”

Wilderness ditch

Minturn now finds itself in the process of planning the development of a new water treatment plant, and the town is also constructing a new water tank using $1 million in federal funds.

In April, Sen. Michael Bennet toured the Maloit Park area near the location of the new tank, and said his longtime work with Minturn on the act of Congress allowing Bolts Ditch to be accessed had spurred his efforts to push federal funding to the water tank in 2022.

Efforts to federally authorize special use of Bolts Ditch in the Holy Cross Wilderness Area, allowing Minturn to fill Bolts Lake, go back to 2016 when Bennet, along with former Colorado Sen. Cory Gardner, introduced the Bolts Ditch Access and Use Act into the 114th Congress.

Bennet, in presenting the Bolts Ditch use legislation to the 2015-16 Congress, said he had already been working on the issue for several years with the town of Minturn.

When the Bolts Ditch Access and Use Act was finally passed by the 116th Congress and signed into law by President Trump in 2019, it was part of a massive public lands package that Rep. Raúl Grijalva (D-AZ), chair of the House Natural Resources Committee, called “one of the biggest bipartisan wins for this country I’ve ever seen in Congress.”

The Bolts Ditch provision, overshadowed by more exciting portions of the package like the creation of five national monuments, did not receive much fanfare.

But Bennet said the work on Bolts Ditch created for him an affinity for Minturn which kept the town’s water issues on his mind as federal funding decisions were being made in 2022. As a result Bennet, along with Sen. John Hickenlooper, secured $1 million for the construction of the town’s new $2.2 million water tank via 2022 Senate appropriations.

Bennet was gifted by Minturn officials with an artifact from the town’s last major water project, the late 1980s effort to replace the town’s wooden water pipes with PVC. Bennet held the section of the wooden pipe in his hands and expressed amazement of the engineering involved, asking how a tap on the system once occurred.

Minturn council member George Brodin explained the engineering of a water tap into a wooden pipe to Bennet, while Mayor Earle Bidez told the senator the new tank should help bring more water pressure to homes in the area.

Tap timing

With wooden water pipes as a recent memory, and low water pressure being a topic of concern, it’s easy to see how Minturn got to the point where the council felt it had to pass a moratorium on new taps. When it did in 2020, however, another development, known as Minturn North, had already submitted an application.

The moratorium said the town has enough water to serve the first phase of Minturn North, which could be up to 70 single family homes. The moratorium didn’t state how long it will remain in effect, but the Town Council ordinance enacting the moratorium says the ordinance shall be reviewed by council every 12 months and “may be continued for an additional twelve month period by majority vote.”

By December of 2021, the moratorium had not been renewed, and another new development idea — roughly 40 units west of Main Street known as Belden Place — submitted an application to the council requesting water taps.

Belden Place asked for its water tap request to be placed on the Feb. 16 council agenda.

A complaint filed by Belden Place against the town of Minturn in Eagle County district court on March 15 originates with that Feb. 16 request.

“In what cannot be a coincidence, Minturn put on the agenda for the Feb. 16, 2022 Town Council meeting, a business item to ‘renew’ [i.e., not “review”] a moratorium on the allocation of water taps for new build construction projects requiring more than three single family equivalent units,” according to the complaint.

The Belden Place complaint alleges the town and Minturn North “promulgated the water moratorium together to the exclusion of other, similarly situated parties” and the moratorium prioritizes Minturn North’s needs over those of Belden Place.

With Belden Place filing their lawsuit against Minturn on March 15 and the town — already engaged in the Battle entities lawsuit it had filed on March 4 — not realizing it was being sued, the Minturn Town Council gave the Belden Place project a smiling approval on March 16.

In May, town staff scheduled a regular meeting agenda item for the council to consider rescinding those approvals (Minturn town code postpones approvals if litigation is filed), but the town was issued a restraining order preventing the council from discussing such action.

The council is also scheduled on Wednesday to discuss, in closed session, an effort to seek declaratory relief to prevent the Belden Place lawsuit from moving forward.

Bidez, at the town’s May 4 meeting, said he’s hopeful that “the lawyers talk this thing through.”