Vallecito water and recreation managers are trying to resolve contract disputes so the marina can reopen by May 15, the start of recreation season. But a recently released government report reveals years of contract noncompliance and confusion they must overcome to be successful.

In some ways, it’s a classic tale of water in the West. Disagreements about how to manage competing water uses – recreation, irrigation and flood control – have resulted in conflicts between neighbors in the small community northeast of Durango. In January, Pine River Irrigation District, which manages the reservoir and dam for the federal government, shared a 185-page report outlining years of noncompliance, insults and confusion involving local organizations.

In February, PRID canceled its contract with Vallecito Conservation and Sporting Association and its subgroup, Vallecito Marina, which managed the marina.

Now, the same managing entities are moving forward with delicate negotiations to try to reopen the marina and reinvigorate the area’s struggling recreation economy.

“In the past, there’s been a lot of resistance. ... That resistance was replaced by cooperation,” said Ken Beck, Pine River Irrigation District superintendent.

The U.S. Bureau of Reclamation established Vallecito Reservoir in 1937 to serve downstream irrigation and flood control, then added recreation later. More than 1,000 downstream irrigators stake their livelihoods on the water PRID manages. Not to mention, 5,000 homes are powered by the reservoir’s electricity plant and 65,000 acres of land receive its water.

Locally, the recreation revenues from the reservoir have become the backbone of the Vallecito lake community’s economy.

“What we’re trying to do is minimize the impact to the community, to the businesses,” Beck said. “Their revenue stream is really very narrow. ... It runs just through a handful of months during the summer.”

The main problem is that recreation doesn’t cover its expenses.

“We have historically never covered the cost of recreation ... for 66 years,” Beck said.

PRID used irrigation shareholder funds, which would normally be kept separate from the recreation funds, and federal grants to help cover the costs.

In 2018, recreation expenses reached about $96,000; 2019, about $117,035. Each year, there was some surplus left in the budget – but that was with half of the expenses paid by a Bureau of Reclamation grant.

In 2018,the bureau told PRID to “be more aggressive in your costs,” Beck said.

“We’re taking monies out of the operation and maintenance of the project, paid by the shareholders, to pay for recreation,” he said.

In response, PRID raised visitor fees at the marina for day use, annual use and other recreation fees in January 2019.

But recreation managers objected, saying higher fees would deter tourism and have a negative impact on the local economy. Vallecito Lake Chamber of Commerce President Paul Eckenrode sent a letter of grievance to PRID – which prompted Beck’s 185-page report.

Vallecito Marina, a subcommittee of Vallecito Conservation and Sporting Association Inc., was contractually obligated to provide updated reports to PRID, but PRID said it never received the documents.

Jim Schank, Vallecito Marina president, said he knew he was supposed to provide the documents.

“Read between the lines. They wanted to raise the fees, and we said no,” Schank said.

Beck’s report outlined other issues with recreation at Vallecito Reservoir.

Vallecito Marina board members used privately owned boats for marina rentals, including boats owned by board members. Owners could keep half of the profits after expenses were paid, Schank said.

The arrangement would have required business sublease agreements with PRID, which Beck said were not allowed in the organization’s contract. The arrangement also presented concerns about misuse of nonprofit status and liabilities for PRID, Beck said.

The Vallecito Lake Chamber of Commerce also held more than 20 private events in 2019, which did not comply with federal requirements to keep the area open to the public.

Now, chamber volunteers are reading through decades of Pine River Project documents to ensure they are in compliance and have necessary contracts in place.

“We want to move forward and try to put these things in the rearview,” Eckenrode said. “Should we need to address them ... then we will. But at this point, we’re not interested in making a fight.”

After years of tension, PRID still plans to work with VCSA. The two organizations plan to establish a temporary marina contract, which could last two or three years.

“There’s a wonderful nucleus of individuals who were not aware of the issues that led to the termination of that contract,” Beck said. “They did not come aware until this report. ... They were embarrassed.”

Both organizations said they felt positive about the negotiations and were pushing to reopen the marina. PRID is also working with the Vallecito chamber to update its contracts.

If negotiations aren’t successful, PRID will have to cut back its services to balance the recreation budget, Beck said.

For users, recreation will be different in the future.

“If you play, you’re going to have to pay,” Beck said. “If we spread that around, it shouldn’t be a burden on anybody.”

VCSA plans to make price adjustments and recently adopted bylaws to better define the marina operating committee with term limits and one VCSA board member serving on the committee, said Tony Shurtz, VCSA board member.

Even Schank, from the now-dissolved Vallecito Marina subcommittee, still supports the marina’s operation in the area because of its importance to the community.

Soon, Eckenrode hopes to see developed recreation facilities at the lake and improved public opinion of recreation management by PRID.

“I think we’re the right people for the right opportunity to do something amazing that hasn’t been done and to really set this thing on a positive path for the next 80 years,” Eckenrode said.

smullane@durangoherald.com