LONGMONT: It is 10:16 a.m. on Valentine’s Day. More than 100 people are gathered in a sprawling room at the Boulder County Fairgrounds. Pencils, notebooks, calculators, auction catalogs and heart-shaped chocolates lie on tables as buyers begin bidding for some of the most sought-after and pricey water in Colorado.
In less than an hour, they will have spent some $4.7 million to buy shares of water in the Colorado-Big Thompson (C-BT) Project, a federal water system whose construction began after the Dust Bowl, which now serves more than 1 million people on the northern Front Range and which helps irrigate thousands of acres of farmland in the South Platte River Basin. It is operated by Northern Water.
This liquid, in some ways, is the Saks Fifth Avenue of water — high quality, clean, neatly packaged and easily delivered within the boundaries of Northern Water’s eight-county district. Another major attraction is that transactions involving C-BT shares don’t have to be approved by Colorado’s water courts, as most water sales do.
Under the contract between Northern Water and the U.S. Bureau of Reclamation, transfers of C-BT Project shares are instead approved by the Northern Water Board of Directors.
Some 90 shares were for sale on that morning, a tiny fraction of the 310,000 shares that comprise the entire project, according to Jeff Stahla, a spokesman for Northern Water, which operates the system for the U.S. Bureau of Reclamation.
And the sales prices were low, averaging just over $52,000 per share, well below the $70,000-plus the water has fetched in recent years, Stahla said.
Jim Docheff is a retired dairyman from Weld County. He sits in the front row, in a Western red felt jacket and tan cowboy hat, one of his sons by his side.
Ultimately he will buy six shares of the water. “It’s all I could afford,” he said, smiling.
How much water is conveyed in a share of the Colorado-Big Thompson system varies from year to year and is tied to how much water the system gathers from the headwaters of the Colorado River and how much irrigators need, Stahla said. Each spring, Northern’s board decides how much water will be allotted to its shares, which are designed to supplement native supplies in the South Platte River Basin.
Some years, the board sets a quota as high as 100% per share, which is one-acre foot. The lowest it has set is 50%. In a dry year, the board might set the quota higher to help growers, and in a wet year, it may be lower because less water is needed.
An acre-foot of water equals about 326,000 gallons.
This purchase will add water security to Docheff’s dairy operations for years to come, he said, as his sons continue the work the family has been doing for 89 years.
But the deal must be approved by Northern Water, which will certify that the water will stay in its district, that it will be put to beneficial use, and that it will serve as a supplemental rather than a sole source of water, a requirement under its federal operating rules.
Docheff and others were surprised by the numbers. “Honestly, I thought the prices were low,” Docheff said.
In recent years, Colorado-Big Thompson shares have topped $70,000. And in fact, one share did sell for $79,200 on Valentine’s Day, but most sold for less, trading in the $50,000 to $72,600 range, according to Scott Shuman of Hall and Hall Auctions, which ran the morning’s proceedings.
And that was good news for farmers, who dominated the bidding. They were able to afford to buy shares in a system in which fast-growing cities from Broomfield north to the Wyoming state line once dominated the sales, often pricing farmers out.
“I think it actually speaks to the fact that there is a robust market for agriculture and you have producers who are looking to firm up their [water] portfolios,” Stahla said.
The lower prices may also be tied to a softening in the housing market in northern Colorado, Shuman said.
“We had an auction in 2019 and we had tons of cities participating,” Shuman said. But not this time around.
“In 2019 there were new subdivisions being built everywhere and we’re not seeing that kind of building now,” he said.
Throughout the proceedings, Carol Yoakum and her family, the sellers of the C-BT shares, sat at the back of the room, watching bid prices post on a huge screen behind the auctioneer.
“I think it went just fine,” she said, after the bidding closed. “I hope it makes everybody happy.”
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