The Colorado Water Trust is celebrating its 20th anniversary this year, with two decades of efforts to restore flows in Colorado rivers. But the trust’s next 20 years will likely face greater challenges of climate change and population growth that are already taking a toll on the state’s waterways.

The trust’s main focus is to improve instream flows, the flows and water levels in a stream or river.

Back in 1973, the Colorado General Assembly recognized the need for a statewide instream flow program. The Colorado Water Conservation Board (CWCB) was given the authority to acquire water rights, or lease them, for instream flow purposes. Instream flow water rights, one of the beneficial uses under Colorado’s water rights law, are the exclusive authority of the CWCB.

While the original purpose of the legislation was to “protect the natural environment,” the instream flow program has expanded to address “water requirements for declining, sensitive, and threatened and endangered species, and protection of macroinvertebrate populations and rare riparian vegetation assemblages,” according to the CWCB.

Since 1973, the CWCB has appropriated instream flow rights for 1,700 stream segments covering more than 9,700 miles of stream.

But the instream flow program got off to a slow start, and drought was becoming an increasing problem in Colorado. One of the first big droughts was in the winter of 1976-77, which "sent shock waves through Colorado’s economy and state government."

There was a gap. The CWCB had the authority over junior water rights for instream flows, but nothing in place to acquire senior water rights.

Those junior rights are useful very high up in the mountains where there aren’t a lot of other rights, said Andy Schultheiss, the trust’s executive director. Senior water rights, on the other hand, are more secure, but the state needed an outside group to scout opportunities for the state to buy or lease those senior water rights.

In 2000, water engineers, water lawyers and conservationists began discussions on how to bolster the instream flow program, and that led to the formation of the trust in 2001.

Like most new water programs in Colorado, the trust faced suspicion from water rights holders early on, especially farmers and ranchers. According to the Colorado Water Exchange, 80% of the state’s water goes toward irrigation, and that’s mostly for agriculture.

“It took us eight or nine years to develop our first project,” Schultheiss said. “There’s a lot of reluctance to try anything new.”

That first major project came in 2009, when Pitkin County and the CWCB signed an agreement, brokered by the trust, to allow the county to lend water for the instream flow program.

Since then, the trust has directed 13.5 million gallons of water through 588 miles of Colorado waterways.

The approach today works like this: The Trust goes to a rancher and says, "How about you stop irrigating, say Aug. 1, and we compensate you for the days you’re missing, and we give the rest of your water to the state to lease it to use in an instream flow reach?" That’s a classic kind of trust project, Schulthess said.

In an apparently groundbreaking permanent water sharing agreement in 2014, said to be the first in the West, the trust purchased a portion of the water rights on the McKinley Ditch to restore flows to a three-mile segment of the Little Cimarron River, a tributary of the Gunnison River. In spring and summer, the water is available for agricultural irrigation. Late summer and fall, the water heads down the Little Cimarron.

“We’ll take anything that keeps water in the streams,” Schultheiss said of the trust’s creative approach.

More recently, the trust has played a major role in trying to protect the Yampa River.

The Yampa has been in trouble for years. But in 2021, its lack of instream flows prompted the city of Steamboat Springs to close the river for most of the summer and fall to all commercial use within the city’s jurisdiction. No boating, rafting or fishing.

The trust has been trying to improve instream flows on the Yampa since the 2012 drought, according to Schultheiss. In some years, the water they buy from Stagecoach Reservoir represents a third or more of the water in the river, he said.

Back in 2012, the trust recognized that there was water sitting in Stagecoach with very few customers.

“And we said, ‘Why not? Why can’t we just buy water and release water from Stagecoach? There’s an in-stream flow reach just below the dam, and then there’s the city farther down.’”

By 2021, the releases from Stagecoach have been institutionalized, according to Schultheiss. Thanks to the Yampa River Fund, a collaboration between the Steamboat Springs and the Nature Conservancy, and with a $4.5 million endowment to pay for it, the river got a record-breaking 2,000 acre-feet of water from Stagecoach. In a year with severe drought in northwestern Colorado, it was enough to keep the water temperatures down and avoid fish kills and other environmental damage.

Marsha and Troy “Doc” Daughenbaugh own the Rocking C Bar Ranch, a cattle and hay ranch at the base of Elk Mountain. The ranch has been in the family for more than 50 years, with senior water rights that go back to the 1890s.

Marsha joined the board of the trust in 2020, after spending nearly two decades with Community Agricultural Alliance in Routt County, including as its executive director. That led her to become interested in water issues and the protection of agricultural water rights.

She first became aware of the Trust from its releases to the Yampa from Stagecoach. “I was really stunned that there was an organization out there than even cared about the Yampa River,” she told Colorado Politics.

“When I started looking at what that was and who was running it, I was so impressed there was an organization that said, ‘We think we can restore water by a market-based form of operation and provide compensation through whoever actually does (own) all of those water rights, but let that water be used all the way through the system.’”

As to the future, Daughenbaugh says the board needs to diversify to include more representation from agriculture. Out of its 16 members, just two come out of ag, which owns the most senior water rights in the state. Agricultural water holders are concerned “that we are the low hanging fruit. We will be the first ones asked to reduce. The first asked to legislatively make some sacrifices.”

Daughenbaugh doesn’t lease her water rights; they need all of it for their cattle and hay operations.

But she’s pleased with the Trust’s work on the Yampa.

“I think the Yampa River would have faced some real difficulties if the trust hadn’t been started. Without those instream flow releases, you could walk across the Yampa River without getting your ankles wet.”

“If we benefit the fish and if we keep the water temps cool enough, that, in my mind, allows other things to happen to the benefit of the whole river system.”

But is the Trust’s approach the right one? Or the only one?

In water terms, the trust operates in what’s known as a water market, akin to a “stock market” for water.  Water markets are a major interest of the Walton Family Foundation, which in April suggested legislative changes would be needed in Colorado to change the transaction costs for water.

According to the Wall Street Journal, the foundation has put $200 million into projects for the Colorado River, with the money going to environmental organizations, universities (including the CU Foundation and the law school's Getches-Wilkinson Center for Natural Resources, Energy and the Environment) and even Colorado media outlets for reporting on the river’s struggles. But the Journal report said the foundation is “drowning out nonmarket solutions." An Oxford study noted in the article said that "the voices being heard are the ones that agree with market-based solutions."

The Foundation has put more than $4.7 million into the trust since 2009 to help it buy or lease instream flow rights. That’s 30% of the trust’s fundraising, according to Schultheiss, who called the Foundation "remarkable."

And the trust can't do what it does without big money, he said, given that the price of of water is going up: "It depends on where you’re talking about, but it is definitely going up as it gets scarce. That's basic economics.

"We are a market-based organization. ... Our whole reason for being is that we participate in the market on behalf of the environment, and we need money to be able to do that."

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