The Town of Rico was essentially a ghost town for 25 years following the end of the mining boom, an unfortunate time-warp that haunts local efforts to provide basic services for developments in the mountain community.

Nowadays the scenic mountain community is pleasantly revived, sporting 160 or so year-round residents and a handful of successful businesses. But securing water service for those interests has forced town officials into a complex game of catch-up, and they are now asking for some help.

Rico has no senior water rights, prompting the town board, through City Manager Eric Heil, to approach the Dolores Water Conservancy District board recently with a proposal that would sell senior rights now controlled by the board over to the town’s existing water tap holders.

"We do not really have adequate water rights for a municipality, so (those companies that have senior rights) could put a call on the river if McPhee Reservoir does not fill and we could legally not divert water," Heil said in a recent interview.

"If our town had filed during the mining days when there were 5,000 people here we would have a humongous surplus and the most senior rights in the entire basin, but the founding fathers back in 1890 did not do that, so this is the situation were in," Heil said.

Rico pulls water from Silver Creek, a small tributary of the Dolores River, for municipal and industrial use that is tapped into by 214 users. Heil hopes to grandfather in those rights, plus a dozen inactive taps, through a deal with the DWCD whereby Rico would purchase enough senior water rights annually as a way to augment existing consumption. Such a purchase would stabilize the town’s claim on water during heavy drought years, although an appropriate rate for the sale would need to be negotiated, Heil said.

"What (the DWCD) is providing in the agreement is not to put a call on the Town of Rico," Heil said during a presentation at the June 8 DWCD board meeting. "We have raised our water rates fairly substantially so we could afford to do this for existing taps."

"The community has a strong sense that because Rico has been there for so long, a grandfathering approach seems appropriate."

Under the grandfather proposal, existing tap owners would not have to join the DWCD tax rolls, but any new municipal or industrial users would be required to join and hence pay the district water tax. Property sold that had the grandfather status would also be required to then join the district, and pay those taxes, according to the plan.

"The essence of what you are proposing is that existing taps at the time of a signed agreement are grandfathered in and don’t owe taxes until they sell to a new owner, at which time they come on the tax rolls," said DWCD board president Don Schwindt. "So you use our water right because we agree to not call your water right in order to provide for the town."

As members, Cortez and Dove Creek both buy municipal and industrial water from the DWCD, but because Rico is the only incorporated town upstream from McPhee with such a long history, the proposal to transfer senior rights deserves consideration, said DWCD General Manager John Porter.

Porter said that Rico’s water claims constitute "a historical consumptive use and diversion," an allowance that fits with DWCD’s water management philosophy.

"This has some merit, and we need to do some research on the legalities to consider the potential," he said.

In the next ten years, Rico expects modest growth of between 120 and 150 new water taps for the town. Those developers would be required to join the district at current tax rates in order to obtain water service.

"The key in my mind is to catch new development," Schwindt said.

Rico’s water woes are further complicated by an arcane and confusing array of state and national water statutes that set the parameters for distribution and ownership.

For instance, the small town’s claim on Silver Creek trumps the instream rights of the Colorado Water Conservation Board (CWCB) but not those of the DWCD. The CWCB instream-flow rights are strongly upheld by state and national environmental laws and ensure natural environments that depend on watersheds are adequately protected from over development. But if Rico were to purchase "new" water on their own, rather than have claims grandfathered in as proposed, the new rights would then become junior to CWCB’s instream flow rights.

"The problem with instream flow rights is that they are more than what the river yields in December, January and February, so if we bought up rights and became junior to those (CWCB’s) rights, then it would be illegal to divert during those three months, and as a municipality we have to divert water all of the time," Heil explained.

Petitioning for a reduction of Colorado’s instream-flows for more consumption is similar to proposing a new ski-area in terms of environmental scrutiny, a move that alerts powerful lobbyists, such as the Sierra Club, Trout Unlimited and the Nature Conservancy.

"The quick answer on that would be no, and the long answer after years of litigation would also, more than likely, be no," Heil said.

"It’s a complex situation. I’m not a water attorney, but I probably will be by the time this is all over."