State ups offers to irrigators for Alkali reservoir

$1.4 million was already spent on land, easements

Lacking 8 percent of the land acquisitions and easements required to start the Alkali Creek Reservoir project is preventing its kickoff, with the state standing to invest taxpayer dollars should landowners not buy-in. 

The state legislature has extended the proposed Alkali Creek Reservoir project in Hyattville’s reversion date another year at the request of the Wyoming Water Development Office. WWDO gathered landowners neighboring the proposed project at Hyattville Community Center last Monday, Sept. 8 in the hopes of rekindling the conversation around Alkali Creek Reservoir, which has been in the works since 2008, with the Nowood Watershed Improvement District being formed as its project sponsor in 2015. 

WHO’S PAYING?

The cost of the reservoir, which would provide roughly 6,000 acre-feet of direct flow from Alkali Creek and diverted flows from Medicine Lodge and Paintrock creeks to about 33 irrigators in the Hyattville area, would be covered largely through state funding. An additional 2,000 acre-feet capacity would be managed by Game and Fish for its flatwater fishery and 900 acre-feet left for fish survival. 

The price has changed over the years: $35 million in 2017, ballooning to $113 million last year and now down to $80 million. State funding will cover all but $2.1 million, which will be leant to the watershed improvement district via a 50-year loan paid by an estimated 33 irrigators at $24 per acre-foot. 

Funding appropriated by the state legislature had a previous reversion date of July 1, 2025, which was extended to July 1, 2026 last session. State funding for the project was cut by $50 million, then restored earlier this year as lawmakers waffled, unsure if the reservoir would ever be built, and if it would be worth it if it was.

“Nothing has been moving forward with design, because obviously the project can’t move forward without the easements that are needed for water for the reservoir … ,” WWDO Director Jason Mead told landowners last week. 

“So, how can we make this a project that benefits everybody?”

Looking to landowners

“Conceptual and somewhat optimistic” ideas presented by the WWDO to entice irrigators included putting the Anita Ditch in pipe -- which Mead said held a high price tag -- and getting water to current grazing allotments through water tanks and wells. Anita Ditch does not currently have a stock water right and would require new rights be established, possibly with a junior priority, should the proposal come into effect. Mead said there might be some “skin in the game” and in-kind services asked of ranchers with this approach, such as the state providing pipe and landowners installing it. 

Feedback on a ditch-to-pipe approach to the Anita Ditch, which would be enlarged to include outflows from the proposed Alkali Creek Reservoir, had previously come back negative, Mead reported. Enlargements to the Anita Supplemental Ditch were entirely trashed following prior public comment. 

Mead also suggested more grant money could become available when looking at the project as a watershed management and conservation measure. Paintrock Creek is notably on the Department of Environmental Quality’s 303(d) List for E. coli contamination. Going ditch-to-pipe on Anita Ditch could potentially improve this. An addition to Highland Ditch to benefit wildlife and fisheries was also panned.

Sprinklers were suggested, as a way to increase water efficiency.

“We typically don’t fund sprinklers, but having gone back and talked to our commissioners and select water committee about the uniqueness of the reservoir project, the complexity of the reservoir project and this idea of trying to really make it more of a win-win for everybody rather than the just the folks that will benefit from the reservoir. They seemed open to the idea,” Mead said. 

The goal of the WWDO was to talk to every landowner, whether they had signed easements or not, in order to rehash disagreements and come to a consensus. Numbers indicated not all were in attendance last Monday night, however. 

HEADS SHOULD ROLL

Among public commenters, downstream landowner Tim Gardiner was an adamant opponent of the project as presented. 

“Candidly, I’m just a tad less than horrified at how the state has ladled out money for a project with no guarantee it’s going to be completed; we’re talking millions of dollars at this point,” Gardiner addressed the WWDO last Monday, stating that heads should roll for the waste of taxpayer money. 

NWID president John Joyce reported in an interview with the newspaper that 92% of the total land and easement purchases required to start the project have been established, amounting to around $1.4 million – provided by the state – already spent. Money has been paid upfront for permanent easements and land acquisition, with temporary construction easements to be paid if and when the project is started. Crop damages would also be paid at that time.

Mead expressed last Monday that he had falsely assumed the community would be fully on-board with the Alkali Creek Reservoir project, such as the landowners surrounding Leavitt Reservoir near Shell have been. Now, the state is working overtime to get holdouts onboard. 

“[WWDO is] going outside the box to show that everyone is putting forth a little effort here, and everyone can potentially benefit from these kinds of projects; it’s not a buy-up or something like that,” Mead said. 

The question was raised, should the project fall through, what would happen with easements and land purchases already in place? Joyce explained that NWID is the current property owner on these acquisitions, but since purchases have been funded through the state, it is likely that land and easements would go to the state. Mead reported that if the project never happened, the state may look to resell the land to recoup funds. 

Trihydro, a consulting and engineering firm out of Laramie, would continue to work on the Alkali Creek Reservoir Project should a new contract be brought forth. 

“I think everybody is agreed, there is a better way to do it in terms of moving forward (with easements); we can’t undo what has been done but we can address it going forward,” Trihydro Senior VP and COO Mark Donner said last Monday. 

Other key concerns of Gardiner included potential conflicts of interest on the NWID board, flood insurance for downstream landowners, and the cost to benefit ratio of an $80 million project for 33 irrigators. 

Paintrock Creek Angus, owned by Martin and Kelli Mercer, sold 260 acres to NWID to be used for the reservoir holding area in 2022. Martin is currently vice chair of the board. The Mercers have supported the project from its beginning, with Martin previously stating that water storage is pivotal for Wyoming agriculture. Gardiner took issue, however, with Mercer financially benefitting from land acquisitions by a board he serves on. 

Most irrigators are concerned with the Anita Ditch, but Gardiner raised a point about a high-risk dam being built upstream of several landowners without insuring them.  

“Why should I put myself at risk for the benefit of my neighbors? … I’m willing to work with you, but you need to give me some assurance that I’m going to be insured for damages or have a bond for damages. Otherwise, what good neighbor in the world would ask their other neighbor to be put at risk for their financial benefit?” Gardiner said. 

As for the cost-to-benefit ratio of 33 irrigators on an $80 million project, Donner reported it still sits at between one and two. The state and grantors look at this number when allocating funds. Should the ratio get too high, the project would be unlikely to receive funding. 

“Instead of looking at how many landowners benefit, we like to look at how many acres will benefit,” Mead said. Project proposals suggest 13,000 acres would utilize the reservoir for irrigation. 

Mead reported that grant funding was “not a slam dunk” and expenses not covered by grants may be wrapped into the cost of the reservoir. 

Another concern raised by landowners included the notion that there was no ceiling on the $24 per acre-foot payment by irrigators. Increases due to inflation and repairs over the 50-year span of the loan were brought to attention. 

STILL A STANDSTILL

Joyce reported this week that no additional easements had been signed since the WWDO meeting last Monday. 

“There really hasn’t been any easements signed for a year,” Joyce said; though he thought proposed water conservation improvements would be of interest to many landowners. NWID has previously stated it will not use eminent domain on property owners to finalize negotiations. 

Joyce explained that funds for the project were allocated from state mineral severance packages, set aside specifically for projects that look into the future, like the proposed Alkali Creek Reservoir, which has the potential to last 200 years.

“The district board feels strongly that it’s an important project and one that would benefit the Basin and the whole state,” Joyce said. “The issues we face are the same as they always have been, just trying to get the easements in place to move ahead.”