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City and Mount Werner present draft Fish Creek treatment-plant IGA to formalize 50/50 ownership and cost-sharing

Steamboat Springs City Council · January 20, 2026
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Summary

City staff and Mount Werner Water District outlined a draft intergovernmental agreement to formalize shared ownership and operations of the Fish Creek Water Treatment Plant, create a quarterly core-team for coordination and dispute resolution, and clarify cost-sharing for routine and capital expenses.

City staff and representatives from the Mount Werner Water District presented a draft intergovernmental agreement (IGA) on Jan. 20 that would formalize a 50/50 undivided ownership interest in the Fish Creek Water Treatment Plant and the lot it sits on.

Assistant City Attorney Jennifer Bach and Michelle (distribution and collection manager) briefed council on the agreement''s key points: Mount Werner will continue operating the plant; the IGA will set transparent cost-sharing for routine operations based on production and allocation rules; significant capital improvements will require joint approval and a pre-agreed cost-share framework; and the agreement creates a "core team" (one staff rep and one elected representative from each party) that will meet quarterly to review operations, budgets and planned capital works.

The IGA would supersede a 1983 agreement and an unsigned condominium declaration that never established a clear, modern governance structure. It also includes default, dispute-resolution, and mediation steps intended to keep disagreements from escalating to litigation. A specific "what-if" clause addresses dissolution: if Mount Werner were dissolved, the draft says plant ownership and related assets would transfer to the city consistent with state statute.

Councilors asked detailed technical questions about rate-setting (staff said city and district rates remain separate and independent), how water rights are accounted for (the draft clarifies both parties' reservoir and direct-flow rights and provides an accounting framework), and how emergency/wildfire scenarios would be handled (staff said emergency responses would be joint, and Mount Werner described planned intake and filter upgrades to increase resilience).

Mount Werner general manager Frank Alone and counsel Mark Hamilton participated in the Q&A and described ongoing master-planning upgrades (filter media and intake monitoring) that build wildfire resilience and improved real-time water-quality monitoring.

Next steps: staff expects the IGA to return for council consideration after the planning and plat steps (the draft plat subdividing lots around the plant will go through planning commission), and Mount Werner will consider adoption. After approvals, deeds will be recorded and operational-level procedures (emergency plans, updated operations manuals) will be implemented.

Quote: "The IGA clarifies ownership and responsibilities, which reduces the risk of future disputes and strengthens water-supply resiliency," Assistant City Attorney Jennifer Bach told the council.