C150069 Benefits & Potential Roles Report

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financing Resources for Secondary Systems Fortuitously, in the bigger picture, there are new financial resources for canal companies and irrigation districts to improve their water delivery systems in this way. Through the Colorado Water Conservation Board, the state has made available low interest loans at very favorable terms to modernize canal systems. Small planning grants are also available to help with development of loan applications, along with technical assistance. Meanwhile, funds may be available from the Farm Security and Rural Investment Act of 2002 (FSRlA), reported to be one of the largest Farm Bills in history. Billions of dollars will be provided over the next five years through the Environmental Quality Incentives Program (EQIP) of the Natural Resources Conservation Service to modernize small lateral canals (through group projects) and on-farm irrigation systems. Under this revitalized program, group lateral improvement projects are being emphasized along with on-farm irrigation system improvements. A new national emphasis is being placed on development of pressurizing agricultural water deliveries, and this naturally lends itself to pressurized irrigation methods that can dramatically improve water application efficiency, reduce labor, and increase yields.2 The CWCB and the FSRIA financial resources, combined with potential revenue derived from secondary water supply, can together dramatically improve agricultural and residential water use. At the conclusion of this chapter, a modernization strategy for agricultural water suppliers will be presented, and involving the development of secondary water supply, and at minimal or no cost to farmers. Bringing in new water customers to help support the ditch company, mainly non-potable residential and commercial landscape users, is a central component of this modernization strategy. It is a strategy that virtually assures that farmers will incur a minimal cost for irrigation system improvement. The change to more efficient on-farm irrigation will incur additional equipment costs for farmers that can be offset through the EQIP cost sharing program. The Secondary System Revenue Stream As urban encroachment extends out into the service areas of these traditional canal systems, farmland becomes intermixed with subdivision developments, schools and commercial property. In order to ensure a continued water supply to agriculture, and in order to ensure that local growers are not discouraged from remaining in production, a pressurized secondary system serving both residential landscape and agricultural uses can be developed. Revenue from this pressurized secondary system flows to the ditch company, much in the way that conventional water assessments have in the past. Traditional water assessments for crop irrigation are collected as usual, while water rates are set for residential uses that are reflective of the costs of providing pressurized water service for this type of usage. A plan and strategy can be implemented whereby pressurized secondary system water revenues cover both the installation of the pressurized system as well as some of the overall modernization of the ditch system for agriculture (Figures 23-24). In addition to allowing for canal infrastructure improvements by way of pressurized secondary supply revenues, the development of this type of water service helps to keep the ditch company water rights in the traditional service area. Water stays on the land and in the local area. The expansion of such service preserves the assets of the agricultural water supplier, continues to preserve the historic role of the entity, and most of all allows the agricultural water supplier to realize benefits from area growth and urban development rather than just coping with the problems and aggravations of urban encroachment. As mentioned in the previous chapter, other parts of the Rocky Mountain region have set the stage for this innovation. Colorado is now experiencing the development of many of these pressurized secondary systems, but generally only for new residential subdivisions or, in a few cases, in some municipal areas.3 So far, these Colorado developments are not benefiting agricultural water suppliers 34