February 27, 2009

$24 million water pipeline project planned between Bailey and Conifer
Mike Potter, Staff Writer

Water pipeline Starts Here The Bailey Water and Sanitation treatment facility, shown here, will be at one end of a 13-mile pipeline project that will carry water to Conifer and effluent water back. (Photo by Mike Potter/The Flume)

A $24 million water pipeline project between downtown Bailey and Conifer may be close to becoming a reality.

John McMichael, the managing partner for Conifer Water LLC, the company that is planning to build the pipeline, said he looked at the water situation along the U.S. 285 corridor and concluded that demand would soon outgrow the supply of water, and something had to be done.

"I thought this is a pipeline situation," said McMichael, who was one of the founders of Colorado Natural Gas in 1996 but no longer works for the company.

McMichael presented his pipeline plans at the Feb. 18 Conifer Area Council town meeting.

The pipeline, consisting of two pipes, would carry about 2.9 cubic feet of water per second out of the North Fork of the South Platte River in Bailey up to Conifer for consumption through one pipe. The water would then be treated and returned to Bailey through another pipe, where it would go back into the river.

One cubic foot of water is equal to 7.48 gallons, meaning 21.692 gallons of water would be removed from the Platte every second.

Three years of work

McMichael has been working on the project for more than three years, he said, and the project is close to the construction phase.

"It's almost funded," he said. "[And] all but one or two permits are in place."

McMichael said that when Jefferson County and the state of Colorado set their well policies in the 1950s, it was estimated that between 4,000 and 6,000 wells would be drilled by the year 2000 in unincorporated Jefferson County.

"By the year 2000, they actually had 28,000 wells drilled," he said. "I was given a number the other day that now that we're in 2009, we're up to 35,000 in unincorporated Jefferson County."

Paul Gisiano, director of program development with Conifer Water, said a solution that would eliminate the dependency on groundwater was needed. That is where water from the Platte River comes in.

"It's clear that the demand and the necessity is there," he said.

Gisiano said the water in the North Fork of the South Platte River will have no problem meeting the demand of Conifer, especially considering that it will be replaced.

He said the 2.9 cubic feet of water per second taken from the river is a small fraction of the total amount of water flowing down the river, and everything taken will be replaced about 100 yards farther down the river.

"After the water comes full loop, it will actually be recommitted to the river," he said.

Simple loop

McMichael called the project a "simple loop," and said that it would operate on a pretty basic principal: replace what is used.

Conifer Water would lay two strings of pipe in the ground following Colorado Natural Gas pipelines between Bailey and Conifer. As the pipeline approached Bailey, it would make use of Colorado Department of Transportation-owned land.

McMichael said contracts are already agreed upon in principle with all of the parties involved.

"The contracts have been in front of all of them," he said. "It's just a matter of getting the contracts polished enough."

One string of pipes will carry potable, or drinkable, water toward Conifer, while the other string will bring effluent water back, and then it would be returned back into the river, leading to no net decrease in water flow down river.

McMichael said effluent water is cleaned wastewater that can be returned to the river.

What comes out goes in

"The whole idea behind it is we take a million [gallons] out of the Platte and we put a million [gallons] back," he said.

The pipeline is set to serve only districts that have wastewater treatment facilities, he said. Those districts would treat the water themselves before sending it back to Bailey.

In the future, when raw wastewater would be transported through the pipe, it would need to be cleaned at the Bailey treatment plant before being returned to the river.

The Bailey Water and Sanitation District would get new wastewater treatment and water facilities built, funded by Conifer Water, McMichael said.

Both plants would cost around $3 million each and take between three and six months to build, he said.

The water treatment facility would belong to the Bailey Water and Sanitation District, but Conifer Water LLC would be its biggest customer.

In exchange for use of the plants, McMichael said, Conifer Water would pay a large tap fee to draw the water.

Conifer Water would pay for its use of the Bailey facilities through service fees charged to its customers.

He said the new water treatment plant would ensure that there would be no increase in fees for Bailey residents in the water district.

Not everyone ready to buy the water

Not all districts are buying into the water pipeline, though.

Rick Angelica, president of the Will-O-Wisp Metropolitan District, said the pipeline has been an interesting idea, but the proposed price is too high for his subdivision to pay.

Will-O-Wisp gets its water from wells and has its own water treatment facility and it plans to use water from Elk Creek for the Tanglewood development near Pine Junction.

Angelica said that the cost of getting water from the pipeline would be five to 10 times more expensive than using the district's water rights.

"The price that he has given us is far more expensive than what our current cost of water is," he said.

Not only is the water more expensive than what the subdivision currently has in place, in order to get water from the pipeline, the subdivision would have to change its current water decree, Angelica said.

But, he said, the idea has been interesting enough that he has been hoping there would be an opportunity to put a valve near Will-O-Wisp, in case the need for water arose.

"It's an interesting concept," Angelica said. "I was pretty fascinated by it at first."

McMichael said that he didn't doubt Will-O-Wisp's current water option is cheaper than what he can offer, but he believes that in the future, after the Tanglewood project is completed, his water might be competitive.

In addition, the pipeline water might be a good alternative for subdivisions with water that must undergo expensive treatment.

Kings Valley-based Mountain Water and Sanitation District has water that contains high amounts of radioactive material, which is expensive to withdraw, according to Gisiano.

Marilyn Saltzman, secretary for the district's board of directors, said the board is exploring the possibility of getting water from the pipeline, but it hasn't committed to anything yet.

She confirmed that there are problems with high levels of radioactive material in the district's well water that need to be addressed, and water from another source is a possible solution.

"It's one option that is definitely worth looking at," she said. "Right now we haven't made any decisions, [but] we definitely have to get the uranium out of our water."

Paying for the pipe

McMichael said the money to pay for the pipeline is coming from two private investors and from bonds. He declined to specify what percentage of the costs would be paid by each.

He plans to use industrial revenue bonds, which are not guaranteed by the state but are state-sponsored.

There is the option for Conifer Water to reorganize into a special district, which would allow it to qualify for tax-exempt bonds, he said.

Reorganizing would push the start date of the project back, he said, but even after the project is complete, Conifer Water would still be able to reorganize into a special district.

McMichael said he wasn't sure what would be required for the water pipeline to turn a profit, because it would be based on the interest rate on the bonds.

"We want to be competitive," he said, "but at the same time, water is an expensive commodity in Colorado."

McMichael thinks that the water would be sold through the company for around $4 per 1,000 gallons.

Work to begin and opponents?

Although work could begin soon, Gisiano said, the timetable for completion is up in the air.

"The timetable is very fluid at the moment," he said. "There are a number of inputs that we're trying to work out."

McMichael estimated that it would take three months to lay the pipe between Conifer and Bailey. The pipeline would extend from the Bailey water treatment facilities on County Road 68 at the bottom of Crow Hill to the Conifer Market Place shopping center that houses Staples on the southwest side of Conifer.

He said a number of people have also expressed some concern about the pipeline's impact on the mountain community.

He said those people tend to want to keep the community small.

"There's always that group of folks that are anti-development," he said.

But as the project moves forward, he thinks many fears will be resolved.

"I think that the folks that are concerned about development, as we move forward, some of that will be kind of quelled," said McMichael.

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