Steamboat Springs — Water has proved to be a contentious issue – as it always does in the West – between the city of Steamboat Springs and Steamboat 700.

Steamboat Springs City Council is nearing a vote this fall on whether to annex the proposed development that could include as many as 2,000 homes during a 20-year build-out. At least one candidate in this year’s City Council election, former City Council President Kevin Bennett, is accusing council members of encouraging “growth without water,” while the developers think they are paying more than is necessary and that they have been misled at every turn.

As it stands, the city will require Steamboat 700 to pay $960,000 during two years to firm up existing but unused water rights the city holds in Fish Creek, Stagecoach Reservoir and the Elk River. The city will spend the money on preliminary legal and engineering work required to ultimately bring an additional 966 acre-feet of water – the estimated amount needed to serve the development – into the city’s system.

Bennett decries that council has voted not to require Steamboat 700 to bring new, “wet” water rights to the table. He said that decision is “unfair to citizens of Old Town and unheard of in contemporary annexations.”

The current council, its attorneys and city staff said they instead were comfortable accepting about $1 million earmarked for water projects, because the city’s Water Supply Master Plan found that the city has a reliable long-term source of raw water but that it should “increase redundancy in the community’s water supply.”

Criticisms that the city is letting Steamboat 700 off the hook for water appear to have legs when compared to what is being required of developer Bobby Ginn in Minturn. Minturn is requiring Ginn to give the town enough actual water rights to serve his massive planned development on Battle Mountain that includes a ski resort, golf course and 1,700 luxury homes.

Ginn offered the Pueblo water board $30 million for 1,337 acre-feet of water from the Columbine Ditch near Leadville, according to The Denver Post. That amounts to about $22,000 per acre-foot of water. Steamboat 700 is paying about $1,000 for each acre-foot of water it is helping the city use.

Ginn’s contract with the Pueblo water board ultimately was squandered last month by the city of Aurora, which had a right of first refusal on the water and partnered with Leadville’s Climax Mine to snatch it up, forcing Ginn to look elsewhere.

Splash or cash

Steamboat 700 officials have argued just the opposite of the critics, claiming the city indicated only that a water requirement would be placed on the developer at the 11th hour. At Tuesday’s City Council meeting – when the city and Steamboat 700 discussed when Steamboat 700’s water payment would be due – Bob Weiss cited the oft-mentioned Brown water agreement. The agreement was signed between the city and Stephen and Mary Brown, former owners of the Steamboat 700 site, in 1993. Weiss is a local attorney representing Steamboat 700.

Weiss said Steamboat 700 relied on a provision in the agreement that states, “The city hereby irrevocably agrees to make water and sewer service available for the development of the property.” The agreement goes on to state, “Such water and sewer service shall be provided in accord with the terms and conditions that are in effect at the time service is requested.”

City officials argue that the Brown agreement does not exempt Steamboat 700 from the city’s recently adopted water dedication policy.

Adopted in May, that policy requires developers of land outside the municipal water utility service area to bring water rights – or money to help develop the city’s existing water rights, through means such as infrastructure – to the table as a condition of approval. Council members began debating the policy in January and voted in March not to require Steamboat 700 to provide “wet” water rights, instead requiring payment for water infrastructure.

But the debate continues.

Weiss pointed out that the city’s West of Steamboat Springs Area Plan states, “The city has sufficient water rights to provide water to all the plan area.” Weiss also said a water requirement was not mentioned in a pre-annexation agreement the city signed with Steamboat 700 last year that was supposed to cover major issues. That agreement included a water and wastewater capacity analysis in a list of required studies, but it did not specify any required water dedications.

For these reasons, Weiss and Steamboat 700 Principal and Project Manager Danny Mulcahy said it was disingenuous of the city to apply its water dedication policy to the development. On Tuesday, Weiss acknowledged that 700 no longer is disputing the payment but argued in favor of giving Steamboat 700 more time and flexibility to pay the $960,000.

“The initial discussions did not include water dedication,” Weiss said. “The question is, do you want to burden this development and the ability to meet the goals : with this kind of payment this early before there’s any development?”

Council members didn’t bend and decided to stick to their staff’s recommendation to require the payment throughout a two-year period.