Reservoir making waves in Gypsum |

Reservoir making waves in Gypsum

Cliff Thompson
Shane Macomber/Vail Daily A herd of cattle rest in the mud and drink from a dry LEDE Reservoir, Tuesday south of Gypsum.

GYPSUM – Gypsum’s effort to seize water rights to LEDE Reservoir 13 miles south of town may again test which has precedence during condemnation – the federal government’s “special use” permits or municipal condemnation rights.The 20-surface-acre reservoir was built in 1931 and holds up to 473 acre-feet of water – enough for 1,900 people for a year. It is owned by LEDE Reservoir LLC, but sits on Forest Service land and operates under a special use permit. The rapidly growing town of 4,200 needs the water to help keep Gypsum Creek flowing.Condemnation allows a municipality or quasi-pubic entity to take property for the public good provided it pays the owner fair market value for the property. In January the town was given possession of the water rights and now it has to pay owner Ned Goldsmith’s LEDE Reservoir LLC what a judge decides the rights are worth. It won’t be easy. An early assessment of the rights by the town estimated they are worth $345,000. Goldsmith has indicated he believes the water is worth 10 times that much.

The value of the water rights will be worked out beneath the eye of District Judge Tom Moorhead. The town has been attempting to purchase the reservoir from ranch owner Ned Goldsmith’s LLC for nearly two decades, Gypsum Town Manger Jeff Shroll said in an earlier interview. Goldsmith owns an 850-acre ranch two miles south of Gypsum. Gypsum Creek supplies about half of the town’s water. Attorneys estimate it may take up to a year to complete the deal.Earlier this month the Colorado Supreme ruled against the reservoir company, which contended the federally-issued special use permit could not be taken during a condemnation by the town. The Forest Service issues special use permits for ski areas like Vail and parts of Beaver Creek, and for rights of way for highways, such as Interstate 70 where it crosses public lands.But the special use permit issue could come up again, said attorney Don Ostrander.

“Does a local municipality have the right to terminate federally-issued permits granted to private individuals,” he asked. The jurisdictional issue could arise during the trial that will determine the value of the water.Gypsum’s attorney, Mark Mays, says it’s an unusual twist to the usually staid condemnation proceedings. “This is unique because of the federal ownership,” he said, adding that the federal interests are not being condemned, just the water rights.If the town does complete the condemnation it will need to dredge the now-silty reservoir and rebuild the water works for the dam, Shroll said earlier.LEDE is an acronym made up of the first letters of the last name of the builders and owners of the reservoir: Elmer E. Lundgren, Minnie E. Lundgren, Mrs. E.P. Engstrom, Charles H. Doll and Ed Erickson. It was built on Forest Service land prior to enactment of federal environmental laws.The Forest Service cannot transfer a special use permit to a new owner and will be required to issue a new permit when the fair market value of the land is determined, said Cal Wettstein, head ranger in Eagle County.

Before that permit is issued the agency will make another assessment – of the environmental effects of the reservoir.Staff Writer Cliff Thompson can be reached at 949-0555, ext. 450, or, Colorado

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