Town of Gypsum officials condemn private reservoir |

Town of Gypsum officials condemn private reservoir

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

GYPSUM – Attorneys representing Gypsum have taken the unusual step of condemning the water right for LEDE Reservoir 13 miles south of the rapidly growing town.Over the last 20 years the town has unsuccessfully negotiated the of purchase the water from owner, LEDE Reservoir, LLC, which is controlled by Ned Goldsmith, who also owns an 850 acre ranch in the Gypsum Valley. “This was not option A,” said Jeff Shroll, Gypsum town manager. “It’s been a long, frustrating process. We’ve been at the negotiating table trying to come up with arrangements.”Some of those arrangements involved trading water for development rights at Goldsmith’s ranch, two miles south of town, Shroll said.Trend for the takingWhen condemnation occurs, a municipality or other governmental agency sues the owner of property, easement or water rights to take over possession if it’s deemed in the public’s interest. The matter is then taken to district court where, under the eye of a district court judge, the town and property owner negotiate a selling price based on fair market value.

“It’s not a common way to acquire water rights,” said David Hallford, a water attorney in Glenwood Springs.”It clearly is a takings issue,” added Jeff Haupt, attorney for LEDE Reservoir LLC. “Some folks find it heavy-handed, but there’s no doubt they have the authority to do it. We were so far apart on the value that we never could come to an agreement. “There’s not a hell of a lot a private land owner can do about it if the government decides it wants the property,” he added. The two sides aren’t even close in their estimates of the water’s value. In its preliminary condemnation filing the town has valued the water right at $375,000. In the response to the notice of condemnation, LEDE Reservoir, LLC said the water was valued at $3.5 million.An additional matter that will determine the price is the annual yield, or volume, of water that flows into the reservoir. The condemnation is expected to take a year or longer to conclude.But such condemnations are likely to become more and more prevalent as the population grows and the demand for water begins to become more acute, said Mark May, the condemnation attorney representing Gypsum.”Gypsum is not alone,” he said. “The only way you can protect yourself is by developing storage capacity.”May said a number of municipalities on Colorado’s Front Range are condemning old gravel pits that will be used as reservoirs.

Gypsum had originally investigated building a reservoir on Red Dirt Creek on Red Table Mountain to help augment flows of the creek, but that idea was nixed when the U. S. Forest Service two years ago proposed turning Red Table Mountain into a designated wilderness. That would preclude building a reservoir there. Depression eraLEDE Reservoir was excluded from the proposed wilderness by some creative map drawing by U.S. Rep. Scott McInnis and U.S. Rep Mark Udall, Shroll saidThe name LEDE, is an acronym made up of the first letters of the last names 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 t was built in 1931 on Forest Service land prior to enactment of federal environmental laws and it now operates under a special permit.The state granted a decree for 473.5 acre-feet, with a conditional right for an additional 473 acre feet. An acre-foot is 326,000 gallons or enough to cover a football field a foot deep.

“A special use permit is more like an easement or license that can be yanked,” Haupt said. That could also change the value of the water, but it’s not clear whether it will become more or less expensive.The 20 surface-acre reservoir holds approximately 400 acre-feet of water the town says it will use to maintain water levels in Gypsum Creek, which is used to supply about half of the town’s water. The remaining water comes from a spring near the creek.”Part of the controversy here is that some people believe the town is doing this to foster more growth,” Shroll said. “Nothing could be farther from the truth. This isn’t so we can go hog-wild and develop everything. This protects the town for 20 to 30 years into the future.”The town envisions using the water in the reservoir to maintain flows in Gypsum Creek so when there’s a call on water, it can be released from the reservoir, and other water users can continue to divert their supply, Shroll said.”The last thing the town wants to see is working ranches not working,” he said. “Our master plan encourages retaining agriculture.”The reservoir hasn’t been fully used for a number of years, Shroll said. The town may have to spend $1 million or more to dredge the reservoir and refurbish its water works., he added. Much of the water for the reservoir comes from a tributary of Eagle’s Brush Creek via Antone’s Cabin Creek that is diverted over a low spot in the hill dividing Eagle and Gypsum, said Bill McEwen, the Eagle River water commissioner.Staff Writer Cliff Thompson can be reached at (970) 949-0555, ext. 450, or cthompson@vaildaily.comVail Colorado

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