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Council moves to pursue CIB funding for Tar Canyon well; signals preference for utility power
Summary
At a public hearing the council reviewed funding scenarios for the Tar Canyon Well Project, learned of a roughly $6.7 million shortfall, and directed staff to pursue a CIB application while retaining USDA paperwork as a fallback; members expressed consensus to prioritize Rocky Mountain Power service with backup generation included in cost estimates.
Gunnison City Council opened and closed a public hearing Sept. 16 to consider applying to the Community Impact Board (CIB) for partial funding of the Tar Canyon (Tar Canyon/Tarkandi) Well Project and discussed funding scenarios and power options for the proposed well.
Kelly (city staff) told the council the city has already invested about $2.4 million in the project (test well, environmental assessment, water rights, property purchase) and that roughly $6.7 million remains to complete remaining phases, including production well development, a 16-inch transmission line, river crossings, road restoration and a well house. Kelly presented multiple financing scenarios showing the effect of different CIB and USDA Rural Development grant/loan mixes on residential bills; a worst-case 100% loan scenario would raise the average bill by about $35 from an average of $57, while favorable CIB terms could reduce that increase to the teens or single digits.
Councilors questioned an updated MAGI (median annual gross income) figure presented as about $61,000 and discussed commissioning an independent income survey to improve grant eligibility. Kelly said CIB typically expects applicants to have explored other funding and recommended also preparing the PER/EA documentation for a USDA application as a contingency.
On power, staff reported Rocky Mountain Power's concept estimate near $1,000,000 to extend utility service to the well; Kelly also modeled on-site generation plus solar/battery and redundancy with higher upfront cost (about $2.2 million) and greater operations and maintenance needs. After discussion about long-term costs, operational risk and future growth, council members signaled consensus to pursue utility power through Rocky Mountain Power while requiring a backup power source be included in project estimates.
Council voted to close the public hearing after directing staff to submit a CIB application, continue USDA paperwork so the city could move quickly if CIB does not fund the full request, and seek updated power-cost estimates (including the cost of required backup generation). No final funding award or loan/grant terms were approved at the meeting.
