Final contracts signed on SDS project, pipeline work to start

May 6, 2011
photo - Aerial view of Pueblo Reservoir and Dam from July 8, 2010.  Photo by THE GAZETTE FILE
Aerial view of Pueblo Reservoir and Dam from July 8, 2010. Photo by THE GAZETTE FILE 

The Southern Delivery System water project is a done deal.

The U.S. Bureau of Reclamation on Wednesday signed final contracts with Colorado Springs Utilities, the city of Fountain, Pueblo West Metropolitan District and the Security Water District, Kara Lamb, a Bureau spokeswoman said Friday.

“All of the issues have been resolved, and the construction of the pipeline can go forward,” she said.

The 62-mile underground pipeline will pump water from the Pueblo Reservoir, a popular recreation area that the federal Bureau of Reclamation manages, to a future water treatment plant at the southeast corner of Highway 24 and Marksheffel Road in eastern Colorado Springs. The treated water will be channeled to Utilities’ existing water distribution center. Eventually, two planned reservoirs east of Fountain will connect to the system.

The municipally owned Colorado Springs Utilities is taking the lead on the regional system, which also will supply water for the communities of Pueblo West, Fountain and Security.

The project is on schedule to be online by April 2016, Colorado Springs Utilities spokeswoman Janet Rummel said Friday.

“We’re now able to proceed with construction we had planned for this year,” she said. That includes building a section of pipeline originating at the Pueblo Dam. 

Construction for the pipeline’s first phase is expected to cost $880 million, plus financing costs of 40-year bonds, Rummel said. Utilities issued $180 million in Build America Bonds in September, to pay for construction for this year and 2012. Water rate hikes will help fund the project. Two 12 percent increases, one of which took effect in January, have been approved so far. The connection to two new man-made reservoirs, Upper and Lower Williams Creek reservoirs, is in a future phase and expected to raise the cost of the system.

The pipeline project is designed to meet the future water needs of the four participants in the project and provide redundancy for Utilities’ water system.

It has been in the planning stages for a decade and has faced opposition from Pueblo County officials, public resistance and numerous permitting hurdles.

Despite the lack of signed contracts with the Bureau, Utilities moved forward with initial construction last fall, laying a 4,000-foot section of pipeline along Marksheffel Road.

“We installed a section of treated water pipeline to get ahead of the county’s plan to expand Marksheffel and save money on repaving costs,” Rummel said.

The move also was designed to meet a land-use permit deadline to take “substantial steps” on the project by April 2012. That pipeline section was completed in February, Rummel said.

The final sign-off by participants comes after a 60-day public comment period for 38-year storage, conveyance, and exchange contracts. The period ended April 25. 

The Bureau received six comments that expressed concern about environmental impacts to fish and other wildlife at Pueblo Reservoir, Colorado Springs’ stormwater issues, population growth in Colorado Springs and Pueblo’s water needs.

The comments were similar to public feedback submitted during the National Environmental Policy Act process to determine the environmental impacts of the pipeline, Lamb said.

The comments were taken into account during the review process of the final draft contracts, she said. 

Among the comments in this go-around was this from Pueblo resident Leah Samuelson: “I have seen red flags since this was first proposed, and I still feel the same inner warnings that this will not be a good venture for Pueblo County. We need water here, not only for people, but for agriculture, which makes our area what its soul is. There has to be, at some time, the ability to stop building and growing, if we will not have the water for people, plants and animals to exist.”

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